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Will refinancing help lower my mortgage payment?
Our financial situation has changed and we're now struggling to make our mortgage payment. We're about 10 years into a 30 year loan. Interest rate is something like 4.7% If we refinance, will that lower our mortage payment?
Asked By Walter | Cleveland, OH | 28 views | Finance Legal Info | 1 week ago
Answer(2)
Jason Craig
Coldwell Banker
Refinancing can lower your payment, but it depends on both the interest rate you obtain and the term you choose. When you refinance you are essentially taking out a new loan to pay off the old one. If current rates are significantly lower than your 4.7% and you have good credit, you could refinance to a lower rate, which would reduce the interest portion of your payment. You could also stretch the loan back out to a fresh 30‑year term, which would lower the monthly payment because it spreads the remaining principal over a longer period. The trade‑off is that you would be starting over on the amortization schedule and could end up paying more interest in the long run.
You also need to factor in closing costs, appraisal fees and any points. These add to your loan balance or require cash up front. A good lender will show you the new payment, total cost of the loan and the "break‑even" point where your monthly savings exceed the costs. Sometimes a 15‑ or 20‑year refinance at a much lower rate keeps your payment similar but saves you tens of thousands in interest.
If your financial stress is temporary, speak with your current lender about a modification or forbearance program before refinancing. If you intend to stay in the home long enough to recoup the costs and the new rate is low enough, refinancing can be a good tool to lower your monthly payment. Shop with several lenders, ask about closing costs and compare the overall savings before you commit.
You also need to factor in closing costs, appraisal fees and any points. These add to your loan balance or require cash up front. A good lender will show you the new payment, total cost of the loan and the "break‑even" point where your monthly savings exceed the costs. Sometimes a 15‑ or 20‑year refinance at a much lower rate keeps your payment similar but saves you tens of thousands in interest.
If your financial stress is temporary, speak with your current lender about a modification or forbearance program before refinancing. If you intend to stay in the home long enough to recoup the costs and the new rate is low enough, refinancing can be a good tool to lower your monthly payment. Shop with several lenders, ask about closing costs and compare the overall savings before you commit.
- 3 days ago
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Amanda Courtney
REP Realty Group
If rates are lower than when you bought, or if you’ve improved your credit score, refinancing can reduce your monthly payment. You can also extend the loan term to ease payments, but it’s best to weigh that against the total interest paid over time.
- 2 days ago
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