Refinancing Tips · January 27, 2025
5 Clear Signs It's Time to Refinance Your Mortgage
Knowing when to refinance can save you tens of thousands. Here are the five clearest signals that it's time to call your mortgage broker.
The question isn't whether to refinance someday — it's recognizing the right moment.
1. Rates Have Dropped 0.75%+ Below Your Current Rate
On a $300,000 mortgage, a 1% rate reduction saves ~$183/month — $65,880 over 30 years. At 0.75%, still $138/month. Run the break-even and if you'll stay in the home longer than the payback period, act.
2. Your Credit Score Has Significantly Improved
A borrower who had 640 at purchase and now has 740 can see rate improvements of 0.5–1.0%. New credit tier = access to programs and pricing unavailable at origination.
3. You Want to Eliminate FHA Mortgage Insurance
FHA MIP lasts the life of the loan. Once you reach 20%+ equity, refinancing to conventional eliminates this cost — potentially saving $150–$300/month forever.
4. You Have High-Interest Debt to Consolidate
Credit card debt at 18–24% vs. a mortgage refinance at 7%: the math is compelling. The key is committing not to re-accumulate the card balances.
5. Your ARM Is About to Adjust
If your 5/1 or 7/1 ARM fixed period is ending and rates are uncertain, locking into a fixed rate provides certainty and eliminates future payment surprises.
HMS provides free refinance analysis with no obligation. Call 309-222-8286.