You've heard from friends, perhaps, that they refinanced their home and what a "good deal" it was for them. Maybe it caused you to wonder if refinancing would be a beneficial financial move for you. Let's sort out the issues.

What Is Refinancing?

Refinancing is the process by which a homeowner may negotiate a lower interest rate on a mortgage, thereby lowering monthly payments. You end up with a new mortgage to replace the original.

In working out the new mortgage, it is possible to reduce monthly payments, lower your interest rates, use some of your equity amount for large purchases, or change mortgage companies.

Is it right for you?

If you answer yes to one or more of the questions below, it's time to make an appointment with us:

  • Are you concerned about saving money or paying off your home sooner? Simply put, refinancing your home to a lower interest rate can lower the payment or shorten the length of the loan, saving you money.
  • Has it become difficult to make your home mortgage payments? Costs are up in many areas of life. But mortgage interest rates may have fallen below the rate on your current mortgage. If market rates drop 1% below your current interest rate, it might be worth it to refinance.
  • Do you have a perfect credit history or has your credit score improved? In that event, refinancing could work in your favor to convert a variable loan rate to one that is fixed, if it will provide a lower interest rate.
  • Are you early in the term of your mortgage loan and intend to stay in your home for more than a few years? If so, your payments are mostly going towards interest, so refinancing could benefit you more now than later in the term when payments are going more toward the principal.
  • Has your home greatly appreciated in value? By refinancing, you take advantage of your home's increased equity (the dollar value difference between the balance you owe on your mortgage and the market value of your property). You can borrow against that equity to pay for other expenses. One option is to refinance and get cash out. In Texas, that option is called a home equity loan.


Refinancing starts you off with a new mortgage. You will now be back to the beginning of the payment process. But the benefits might just be worth it. Still, refinancing generally costs between 3% and 6% of the loan's principal. Visit with a CNB&T mortgage lender, and we will help you discover whether or not it can be an advantage for you to refinance.