Personal Finance What’s the Best Time of Year to Refinance your Home? Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on Pinterest (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mint Published Aug 25, 2020 - [Updated Apr 5, 2023] 4 min read Advertising Disclosure The views expressed on this blog are those of the bloggers, and not necessarily those of Intuit. Third-party blogger may have received compensation for their time and services. Click here to read full disclosure on third-party bloggers. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. Intuit does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. After 20 days, comments are closed on posts. Intuit may, but has no obligation to, monitor comments. Comments that include profanity or abusive language will not be posted. Click here to read full Terms of Service. As of May 21, Bankrate reported a mortgage interest rate of 4.29% for a 30-year fixed loan. Mortgage interest rates are higher than they were at the end of 2012 and through 2013, but at least they’re nowhere near the record 18.63% they were in October 1981! The old rule of thumb about refinancing was you should consider it if you can get an interest rate at least 1% lower than what you’re paying. But there are other considerations too, like refinancing costs and how long you plan to stay in your home. If you’re not sure, online calculators like Zillow’s can determine your “break even” point for refinancing. Though you might think that any time you can lower your monthly payment you should refinance, that’s not necessarily true. Refinancing costs money, and you need to evaluate all pertinent factors before making your decision. It’s also wise to know when not to refinance. When Not to Refinance There are 3 general situations when refinancing is not a good idea, according to ABC News: When you’ve had your mortgage for a long time – because you’ll revert to paying interest again rather than building equity as you’re doing now When your current mortgage carries a pre-payment penalty – which increases the time it takes to break even once you refinance. When you plan to move within a year or two – because your monthly savings may not be enough to offset the up-front costs of refinancing. Next step: Sign up for Mint and receive automatic mortgage interest rate alerts. Before Refinancing Mortgage rates are expected to creep upward in 2014, but that doesn’t mean you should drop everything and refinance immediately. Ask yourself the following questions before committing to refinancing. What are your goals? – Do you want to lower monthly costs, savings over the term of the mortgage, or equity cash? If lowering monthly costs is your goal and you plan to be in your home for 5 years or more, then refinancing may be a smart move. How much lower is the new rate? Use a “break-even” calculator to determine if it’s low enough to be worthwhile. How’s your credit history? You won’t get those great advertised rates unless you meet lender credit requirements, which generally means a high credit score. How much is your home worth? Many homes have lost value in recent years. If your home is worth less than what you owe, refinancing is probably not a good idea. Will you have to get private mortgage insurance? If you’re refinancing 80% or more of your home’s value, you will probably have to get private mortgage insurance (PMI). If you don’t currently have PMI but will have to get it, it can offset the savings from refinancing. Best Time of the Year to Refinance If you plan to refinance, choosing the right time of year can make a difference. According to Financial Samurai, people in financial services often rely on year-end bonuses, and the closer it is to year’s end, the more loan officers want to close loans. The trick is, however, that you have to know when a lending institution’s fiscal year ends, because it may not correspond to the calendar year. Seeking refinancing during a lending institution’s last fiscal quarter of the year can help you benefit from loan officers who want to shine when being evaluated for bonuses. Best Time of the Month to Refinance Just like car dealers want their monthly numbers to look good and are hungrier to close deals toward month’s end, mortgage loan officers want to reach their monthly targets. Again, according to Financial Samurai, loan officers often save up their energy for the last half of the month. By refinancing during the last half of the month, you may be able to secure better terms due to your loan officer’s desire to meet monthly targets. Interest rates are rising from the record lows of late 2012, so now may be a good time to consider refinancing. Look for a significantly lower interest rate, and you’ll be better off if you plan to stay in your home several more years. If you can change from an adjustable rate loan to a fixed loan, you’ll avoid future rising rates and can often get a better rate than you would with an adjustable loan, particularly if you have good credit. One terrific way to monitor mortgage rates is with a finance app like Mint. Mint offers automatic rate notifications to keep you up-to-date on interest rate trends, whether you’re at home or mobile, because Mint syncs to your smartphone as well as your computer. It’s one of the easiest ways to ensure you refinance at the best time. Next step: Sign up for Mint and receive automatic mortgage interest rate alerts. Previous Post The Undeniable Power of Financial Graphs (Yes, We Said Graphs) Next Post Expert Interview with Dominique Brown on Personal Finance and Debt… Written by Mint Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint Browse Related Articles Mint App News Intuit Credit Karma welcomes all Minters! Retirement 101 5 Things the SECURE 2.0 Act changes about retirement Home Buying 101 What Are Homeowners Association (HOA) Fees and What Do … Financial Planning What Are Tax Deductions and Credits? 20 Ways To Save on… Financial Planning What Is Income Tax and How Is It Calculated? Investing 101 The 15 Best Investments for 2023 Investing 101 How To Buy Stocks: A Beginner’s Guide Investing 101 What Is Real Estate Wholesaling? Life What Is A Brushing Scam? 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