Refinancing
Sometimes the math works. Sometimes it does not. You should get the same honest answer either way.
The only question that matters
How long until the savings cover the cost of doing it? If you plan to sell before that date, refinancing is a bad deal no matter how good the rate looks.
I will run that number for you and put it in writing. If the answer is “don’t,” I will tell you that, and you will have lost nothing but a phone call.
When it usually does make sense
- You are on an FHA loan, you have real equity now, and the mortgage insurance is pure waste
- Your credit score has moved up a tier or two since you closed
- You are carrying high-interest debt and have equity that could retire it
- You want to be free of the mortgage sooner and can handle a shorter term
A word on cash-out
Turning credit card debt into mortgage debt lowers the interest rate, and it also turns an unsecured problem into one secured by your house. That can be the right move. It should never be an impulsive one.