Refinancing a mortgage: When and how to refinance
Get to know the ins and outs of mortgage refinancing and find out what your options are for refinancing.
With so many financing and credit options available to homeowners, refinancing your home loan mortgage might sound confusing when you start the process. Here, we cover what refinancing a mortgage involves and how it can benefit you and your finances.
What is refinancing a home loan mortgage?
Refinancing is a process homeowners go through to change the interest rate and/or terms of their current mortgage. In essence, refinancing is changing aspects of your mortgage. Refinancing is not taking out a second or additional mortgage, such as a home equity loan or home equity line of credit.
Doing the math
Imagine that your current interest rate is at 6.5%* (not unusual just a few years ago) and you have the opportunity to refinance at 4.5%*. Before taxes and insurance, here is how 2% impacts this monthly mortgage payment.
$1042.91 monthly payment ($165,000 mortgage at 6.5%*)
$836.03 monthly payment ($165,000 mortgage at 4.5%*)
$206.88 monthly savings
* Please note that interest rates are used as examples only and not intended to indicate actual rates currently available.
Use our mortgage calculators to plug in potential refinancing rates and compare them to your current mortgage rate — you’ll be able to see exactly how much refinancing can save you.
Types of refinancing
There are several refinancing options to consider:
1. Traditional mortgage refinancing: Adjusts your interest rate and/or terms.
2. Cash-out refinancing: Like a traditional mortgage refinance, but adds a cash-out option to receive funds at closing.
3. Streamlined refinancing: Can expedite the loan approval process and offer lower rates if your mortgage is with U.S. Bank.
4. U.S. Bank Smart Refinance: A one-time refinancing option with no closing costs.
When to refinance your mortgage
Perhaps the most common reason to refinance is to lower your interest rate and, consequently, your monthly payment as well as the overall cost of your home. The interest rate on your mortgage has a substantial impact on the amount of your monthly payments.
You also might consider refinancing if your mortgage has an adjustable rate and you want a more traditional mortgage. Or, you may be looking to consolidate debts at a lower interest rate. There are several reasons to explore refinancing.
How to refinance a mortgage
There are three steps on how to refinance a mortgage.
1. Compare mortgage rates: Check out the current rates to determine which mortgage rates are best for you and if refinancing is worth it.
2. Prequalify for new mortgage loan terms: Fill out a form with some of your basic information and loan details and learn how much you may qualify for when refinancing your mortgage.
3. Apply to refinance your mortgage: Once you get an idea of how much you qualify for, start the mortgage refinancing process by applying with a mortgage loan officer.
Want to learn more about refinancing your mortgage? We’re ready to help.
Mortgage and Home Equity products are offered by U.S. Bank National Association. Loan products are offered by U.S. Bank National Association and subject to normal credit approval.
Investment and Insurance products and services including annuities are:
Not a Deposit ● Not FDIC Insured ● May Lose Value ● Not Bank Guaranteed ● Not Insured by any Federal Government Agency
U.S. Wealth Management – U.S. Bank and U.S. Bancorp Investments is the marketing logo for U.S. Bank and its affiliate U.S. Bancorp Investments.
The information provided represents the opinion of U.S. Bank and U.S. Bancorp Investments and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.
U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
For U.S. Bank:
Equal Housing Lender.
Deposit products are offered by U.S. Bank National Association. Member FDIC. Mortgage, home equity and credit products offered by U.S. Bank National Association. Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice.
U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.
For U.S. Bancorp Investments:
Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.
U.S. Bancorp Investments is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser. To understand how brokerage and investment advisory services and fees differ, the Client Relationship Summary and Regulation Best Interest Disclosure are available for you to review.
Insurance products are available through various affiliated non-bank insurance agencies, which are U.S. Bancorp subsidiaries. Products may not be available in all states. CA Insurance License #OE24641.
Pursuant to the Securities Exchange Act of 1934, U.S. Bancorp Investments must provide clients with certain financial information. The U.S. Bancorp Investments Statement of Financial Condition is available for you to review, print and download.
The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1.800.289.9999 or via https://brokercheck.finra.org. An investor brochure describing BrokerCheck is also available through FINRA.
U.S. Bancorp Investments Order Processing Information.
© 2022 U.S. Bancorp
