When NOT to Refinance

The Expert Advice

Refinancing costs money. If it takes 48 months to "break even" on those costs, but you plan to move in 24 months, you are losing money. Always calculate your Break-Even Point first.

The Real Problem

The "Reset" trap. If you are 10 years into a 30-year mortgage and you refinance into a NEW 30-year mortgage, you are resetting your interest clock. You might pay less per month, but you'll pay MUCH more in total interest over time.

1. Moving Soon

If you're selling within 2-3 years, you likely won't recoup the closing costs.

2. Near the End of Your Term

If you only have 5-10 years left, don't reset to 30 years just for a lower payment.

3. Closing Costs are Too High

If the "No Cost" refi actually just rolls $10k into your balance, it's not "No Cost."

4. Cash-Out for "Bad" Debt

Don't use your home equity to pay off credit cards if you haven't fixed the spending habits that caused the debt.

5. Small Rate Drop

A 0.25% drop usually isn't worth the hassle unless your loan balance is very high ($1M+).

The "2% Rule" of Thumb

If the total closing costs are more than 2% of your loan amount, and the monthly savings are less than $150, you should think twice. We'll run the numbers for you—for free—and tell you if it's a bad move.