Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

When to Refinance Your Home


When is it a good idea to refinance? It depends on your financial situation and what you’re looking to get out of refinancing.

Here are some common scenarios where refinancing your mortgage makes sense.

Lower Your Interest Rate

One of the most common reasons to refinance a home is to lower the interest rate.

If you are able to find rates that are 1.5%-2% lower than you are paying now, it may be worth thinking about. Keep in mind however, that when you refinance you will need to pay closing costs and possibly extend your loan terms.

Refinancing could actually lead to higher monthly payments than you have under your current terms, so do the math beforehand.

Make Your Monthly Payment More Affordable

If you are having trouble making your monthly payment and aren’t as concerned about paying more over the life of the loan, refinancing may be a good option.

You can lower your monthly mortgage payment by extending the loan terms. While it’s not advisable from an investment perspective, sometimes affordability is the most important factor.

Build Equity Quickly and Pay Off Your Mortgage Sooner

For people who have no problem paying their monthly mortgage payment, refinancing to shorten the loan term is a great way to quickly build equity.

It will also enable you to pay off your mortgage sooner, with less interest. Of course, since you’re paying off the same amount in a shorter period of time, your monthly payment will be higher.

Change Your Loan Type

Adjustable-rate mortgages (ARMs) typically have interest rates that start off low and increase over time.

Depending on your situation, you may be interested in changing your loan from an adjustable-rate mortgage to a fixed-rate mortgage before the interest rate increases. Refinancing will enable you to make this change.

While this may seem like a great idea, make sure you compare the closing costs with how much you will save over the life of the loan. If you’re going to be in the house for at least a few more years, changing your loan type will usually work out in your favor.

Consolidate Your Debt

Have you taken out a home equity line of credit (HELOC) on your home? If so, refinancing is a great way to consolidate your debt.

Combining your HELOC with your mortgage will make things simpler by giving you only one payment and one interest rate.

If you find yourself in any of these situations, refinancing may be the way to go.

To learn more about the ins and outs of refinancing, contact one of our mortgage specialists at a branch near you.

Trending Topics

Credit Cards for Small Business – South Carolina

First Bank is rooted in our dedication to small businesses and offering credit cards for your business is one way we can help. With six locations in South Carolina, First Bank is there to back all of your small business...

How Much Should I Have in Savings at Age 35?

How much money should you have in your savings account at the age of 35? It largely depends on when you started saving, your income and lifestyle, and whether you carry consumer debt. Savings for Adults in Their...

5 Mortgage Tips to Help You Get the Best Deal

Applying for a home loan can be a confusing and sometimes frustrating experience for prospective home buyers, but it doesn’t have to be. By keeping these mortgage tips in mind, you can make the home-buying process...

Calculate Your Monthly Mortgage Loan Payment (with Taxes and Insurance)

A mortgage loan calculator with taxes and insurance can help prospective homeowners prepare for the financial responsibility of owning a home. Purchasing a home may be one of the biggest decisions you ever make, so it is...

Calculate your Balance Transfer

If your current credit card isn’t meeting all of your needs, consider switching to a First Bank credit card. First Bank now offers the option to transfer your balance from your current credit cards to a First Bank...

Current Mortgage Rates 30-Year Fixed

Is now the right time to buy the house you have your heart set on? One important thing to consider is the current mortgage rate trends and whether a 30-year fixed-rate mortgage is a good fit for you. At First Bank, our...

Commercial Financing

Finding the right commercial financing is easier said than done. If you’re starting a business or trying to grow, finding the right option can be a tough task. Learn more about different commercial...

Wilmington Bank

Wilmington, North Carolina, has a lot to offer, and that includes the town’s financial institutions. The very best qualities of Wilmington’s banks are evident in the five First Bank locations found on Oleander...

5 Ways to Get the Lowest Mortgage Rates

If you are looking for some of the lowest mortgage rates in North Carolina or South Carolina, First Bank might be able to help. Choosing a mortgage option can be one of the most confusing aspects of the home purchasing...

Wondering Where to Get Mobile Merchant Services?

Wondering where to get mobile merchant services for your business? First Bank can help you with all of your business needs, including in-store and mobile merchant services such as payment processing, reporting, and check...