So, you’re looking to refinance your mortgage. Or, maybe you’ve heard about the low interest rates and are wondering if now is the perfect time to start the process. Whatever the case, it’s important to know the steps that go into refinancing your mortgage, and how to decide if now is the right time for you. In this guide, we’ve covered the basics of refinancing, and why and when it may be a good idea to refinance your mortgage.

What does it mean to ‘Refinance your Mortgage?’

Simply put, refinancing is the process of replacing an existing mortgage with a new loan. The steps to refinance your home follow much of the same process as when you applied for your first mortgage. Be sure to research which refinance option is right for you, gather all important financial documents, and submit a refinancing application to be approved. 

Documents You Will Typically Need:

  • At least two recent pay stubs.
  • W-2 statements and tax returns for the past 2 years.
  • Asset statements (bank accounts, retirement accounts, investment accounts, etc.)
  • A list of debts (car or student loans, copies of alimony or child support payments, etc.)
  • Homeowners Insurance declarations page.

Why Refinance Your Home? 

A few of the best reasons to refinance are to obtain a lower interest rate, shorten the term of your loan, switch from an adjustable-rate mortgage to a fixed (or vice versa), home remodel project, or consolidate debt. If you’re planning to make some renovations, pay off various debts, or fund large purchases, you can leverage your home equity to obtain a cash-out refinance

Refinancing may or may not be in your best interest depending on your goals of refinancing. We are here to help show you some numbers. For example, refinancing could help reduce the payment terms of your mortgage. If you are 7 years into paying a 30-year mortgage and refinance into a 20-year loan, you will save 36 payments and possibly pay less each month with your new mortgage. It is all about understanding your monthly budget, how much you can afford to pay, and consulting the experts to understand if now is the right time to refinance. 

When to Refinance Your Home

In general, if you can save money by refinancing your mortgage, it would be worth exploring this option. Here are some situations that can help you determine if refinancing is right for you:

  • Interest rates have gone down: Interest rates fluctuate based on several factors, including inflation, the Federal Reserve Monetary Policy, level of economic growth, and other factors. In general, a good rule of thumb is to refinance if rates fall 1-2% below your current rate. However, every homeowner’s financial goals and needs are different, so be sure to calculate your potential savings while also being mindful of your monthly budget.
  • You have an ARM loan, and rates are increasing: If rates are increasing, you may want to consider switching to a fixed-rate mortgage to avoid large payments down the road. 
  • Your credit has improved: Your credit plays a significant role in determining your rate. In general, the higher your credit score is, the lower the interest rate you’ll receive. Calculate how your score can affect your rate, here


We are currently refinancing many of our former clients, so if you’ve had your mortgage for a few years, now might be the right time. If you’re thinking of refinancing, give us a call at 608-833-3800, or apply online today. We would love to discuss your options!