Refinance a Home

Whatever your reason for refinancing, it's a good idea to calculate your costs and potential savings before you make your decision. You should consider:

• Prepayment penalties: Check your current home loan to see if there are any penalties for paying off your principal balance early.
• Closing costs: Determine whether your savings will exceed your closing costs.
• Term length: Factor in any additional years of interest you'll need to pay.

You can use our Mortgage Refinance calculator to determine when you will break even on a mortgage refinance and what your new monthly payment might be.

Generally speaking, refinancing is a good idea when it:

• Helps save you money by obtaining a lower interest rate
• Achieve your financial goals by reducing your monthly mortgage payments
• Shorten existing loan terms

For example, if you have a 30-year mortgage but want to pay it off more quickly, you could refinance to a 15-year mortgage. You can also refinance to change from an adjustable-rate to a fixed-rate mortgage. If you need additional funds for a financial emergency or home improvements, refinancing allows you to tap into your home equity to cover those costs.

When you refinance, you take out a new mortgage to replace your current one. It works similarly to getting a mortgage when you buy a new house. Instead of using your new loan to purchase a home, you use it to pay off your existing mortgage.

• Pay stubs covering the most recent 30-pay period.
• W2s for the previous two years.
• Bank statements covering the past 60 days.
• Current mortgage information.
• Proof of homeowners insurance.

The exact amount of time it takes to refinance depends on your loan's complexity. Most refinance transactions take 30 to 45 days to complete.

Yes. You can replace your first and second mortgage with a single refinance loan. If you have a home equity loan, you may decide to keep it and only refinance your first mortgage. The second mortgage is kept intact through a process called subordination. This process can take time, and your second mortgage lender will likely charge a fee.