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Refinancing your home can be a smart financial move that can help you save money, lower your monthly payments, or even tap into your home's equity for other financial goals. If you're considering refinancing, it's essential to understand what to look for to ensure you make the most out of this opportunity. Here are a few things to consider before refinancing:


1. Interest Rates and Terms:

One of the primary factors to consider is the current interest rates. Even a slight decrease in interest rates can translate into significant savings over the life of your loan. Additionally, pay attention to the terms of the new loan, including the length of the loan (e.g., 15-year or 30-year), as well as any adjustable-rate features. Choose a loan term that aligns with your financial goals and budget, whether it's paying off your mortgage faster or reducing your monthly payments.


2. Closing Costs and Fees:

Refinancing typically involves closing costs and fees, similar to when you initially purchased your home. These costs can include application fees, appraisal fees, origination fees, and more. Before committing to a refinance, make sure you understand the total closing costs and factor them into your decision. Some lenders may offer no-closing-cost refinancing options, but charge a higher interest rate. While this can be attractive upfront, a higher interest rate will increase your loan amount. At Champion, we offer you the option to roll closing costs into the loan amount so there's nothing due at signing and do not charge a higher rate. Carefully evaluate the long-term implications and compare it with traditional refinance options to ensure refinancing is right choice for you.


3. Credit Score and Financial Profile:

Your credit score plays a significant role in determining the interest rate you qualify for when refinancing. If you had a lower credit score when you first bought your home, chances are you may qualify for a better interest rate! Before applying for a refinance, take steps to improve your credit score if needed. Pay down existing debts, make timely payments, and review your credit report for any errors that need to be addressed. Lenders also consider other aspects of your financial profile, such as your income, employment history, and debt-to-income ratio. Be prepared to provide documentation of your financial stability and demonstrate your ability to repay the loan.


4. Loan Options and Programs:

There are various loan options and programs available for refinancing. Each type of loan has its own eligibility requirements, benefits, and drawbacks. It can all seem a little overwhelming at first, so talk with one of our Mortgage Loan Originators to gain a better understanding of your options and be able to choose the one that best fits your current financial path. Additionally, consider specialized refinancing programs, such as cash-out or streamlined refinancing. For cash-out refinancing, you can receive up to 90% loan-to-value on either ARM or Fixed-Rate loans, depending on the terms requested. Cash-out refinancing allows you to access your home's equity for home improvements, debt consolidation, or other purposes. Streamline refinancing offers a simplified application process and generally fewer documentation requirements for eligible borrowers, making your refinance process quicker, but every situation is unique.


5. Future Financial Goals and Considerations:

Before refinancing, consider your long-term financial goals and how refinancing fits into your overall financial plan. Are you looking to lower your monthly payments, pay off your mortgage faster, or access cash for other investments or expenses? Consider how refinancing can help you achieve these goals and improve your financial outlook. Additionally, factor in any potential life changes, or financial considerations that may impact your ability to repay the loan in the future. Whether it's retirement, a career change, or unexpected expenses, ensure that your refinance aligns with your future financial stability and flexibility.


Refinancing your home can be a positive step towards achieving your financial goals and saving money over the long term. By carefully considering the interest rates, closing costs, credit score, loan options, and future financial considerations, you can make an informed decision that puts you on the path toward financial freedom. We're here to support you every step of the way and help you experience more on your refinancing journey.