The Right Time to Refinance: A Homeowner's Financial Checklist

Four Signals That It’s Time to Refinance

1. Current Rates Drop

If current market rates are **1% lower** than your existing rate, it's almost always a good time to run the numbers.

2. Equity Crosses 20%

You've paid down your loan or home values have risen, allowing you to eliminate costly Private Mortgage Insurance (PMI).

3. Your FICO Score Rises

If your credit score moved up a tier (e.g., 680 to 740), you qualify for significantly better rates and terms.

4. ARM Rate Adjustment Looms

If you are 6-12 months away from your Adjustable-Rate Mortgage (ARM) initial fixed period expiring, lock in a fixed rate.

 **John Titolo (NMLS #2059429)**, our Refinance Expert, notes: "The right time is personal. We focus on when the financial benefit outweighs the cost, whether that benefit is a lower payment, or a substantial cash-out lump sum."

The Golden Rule: Calculating Your Break-Even Point

Regardless of interest rates, the single most important factor is the **Break-Even Point**. This is the moment in time when the savings from your new, lower monthly payment fully recoup the total cost of the refinance (closing costs).

How to Calculate It:

Break-Even (in Months) = Total Closing Costs / Monthly Savings

**Actionable Insight:** If your closing costs are $4,000 and your monthly savings are $200, your break-even point is 20 months. If you plan to stay in the home longer than 20 months, the refinance is financially worthwhile.

 **Dan'Elle Hughes (NMLS #2027515)** advises clients: "If you plan to move within the next three years, your break-even point needs to be very short, or the refinance may not be the right move. We help you forecast that hold period accurately."

When Refinancing May Not Be Worth It

You Are Moving Soon

If your holding period is shorter than your calculated break-even point, you will lose money.

Costs Exceed Savings

The amount of interest you save over the long run must significantly exceed the upfront costs.

Mortgage is Nearly Paid Off

Refinancing late in the term restarts the amortization schedule, meaning you pay more interest overall.

Take the Guesswork Out of Timing

Our NMLS-licensed experts, including **Joseph Schibelli (NMLS #1214394)**. **Kenneth Mickens (NMLS #2415397)** and Dan'Elle Hughes (NMLS #2027515), provide personalized break-even analysis so you know precisely when to act.