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Refinancing Myths Debunked

“Refinancing” is a scary word for many people, but that shouldn’t be the case for you. For many homeowners, refinancing can not only lower your monthly payments and help with your monthly budget, but it can save you thousands of dollars in the long run.


For years now, we’ve been hearing that interest rates will be on the rise, and although there have been some small increases, you’re still in a great position to drastically lower your interest rate. The general rule is if your mortgage interest rate is more than one percent above the current market rate, you should consider refinancing.


Don’t brush off refinancing just because it seems like a long and daunting process. An informational call with a lender to see how rates compare will only take a few minutes. There are also some programs for streamlining the application process. And besides, isn’t the amount of money you could save worth the time and effort?


Seeing your Adjustable Rate Mortgage (ARM) increase after the introductory period can be incredibly stressful and place a squeeze on your budget. Many people assume they’re stuck, but ARMs can be refinanced, just like fixed-rate mortgages. You can even switch to a shorter term fixed-rate mortgage, such as 15 or 23 years. The longer you’re planning to stay in the home, the more sense it makes to look into refinancing.

A Simple Checklist From PennyMac USA

Before mortgage refinancing, most lenders are going to encourage you to run through the checklist below and answer each of the questions.

1. What are your goals?

  • Are you trying to lower your monthly payments?

  • Do you want to shorten or extend the life of your loan?

  • Would you like to use equity to pay off debt or fund home upgrades?

  • Do you qualify for a government-backed conventional refinance program?

2. Does refinancing make financial sense?

  • Is the interest rate lower than your existing rate?

  • Will the new rate increase your monthly payments?

  • Will you pay more money over the entire length of the loan?

3. Can you afford closing costs and fees?

  • Are you prepared to pay the application fee?

  • Have you determined title insurance, attorney and closing costs?

  • Do you have these funds to pay upfront?

4. Have you determined what the payoff amount will be (including any prepayment penalties)?

  • Calculate the payoff amount (balance + interest)

  • Determine any payoff penalty fees

  • Request a copy of the payoff statement

5. Do you know what mortgage refinancing documents are needed to apply? Can you obtain them?

  • Paystubs

  • Tax Returns, W-2s, and/or 1099s

  • Credit Report

  • Statement of Debts

  • Statement of Assets

Want to talk to some reasonable lenders? Contact my office today to get some recommendations. These are all client reviewed lenders that have told us that they are great to work with.

About the Author: The above Real Estate information on refinancing myths was provided by Scott Hollis a Managing Broker and Business Development Coach. Scott Hollis is a Managing Broker with John L Scott - Lacey. Scott and can be reached via email at or by phone at 360-701-9682. Scott has helped people move in and out of the South Puget Sound for the last 4+ Years.

Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service Real Estate sales anywhere in the I-5 corridor.

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