Paying points makes sense if you plan to stay in your home for at least 5-7 years. Each point typically costs 1% of your loan amount and reduces your rate by approximately 0.25%.

For example, on a $400,000 loan, one point costs $4,000 and might save you $50-75 monthly. Calculate the break-even: $4,000 ÷ $60 monthly savings = 67 months. If you'll stay longer than 67 months, points could save money long-term.

Yes, but your options are limited. If you're underwater (owe more than your home's worth), consider these programs: FHA Streamline Refinance (for existing FHA loans), VA Interest Rate Reduction Refinance Loan (IRRRL) for VA loans, or USDA Streamlined Assist for USDA loans.

These programs often require no appraisal and minimal documentation. Conventional underwater refinancing is generally not available, but some lenders offer high LTV programs up to 97% loan-to-value.

Cash-out refinancing replaces your existing mortgage with a larger loan, giving you the difference in cash. You get a fixed rate and predictable payments, but pay closing costs on the entire loan amount.

A HELOC (Home Equity Line of Credit) is a second mortgage that acts like a credit card secured by your home. You keep your existing mortgage, access funds as needed, and typically start with interest-only payments. HELOCs usually have variable rates and lower upfront costs, making them ideal for ongoing projects or uncertain funding needs.

The typical refinancing process takes 30-45 days from application to closing. Here's the timeline breakdown: Application and initial review (1-3 days), appraisal scheduling and completion (7-14 days), underwriting and document review (10-20 days), final approval and closing preparation (3-7 days).

Streamline refinances for government loans can be faster (20-30 days), while complex situations or busy periods may extend to 60 days. You can speed up the process by submitting complete documentation upfront and responding quickly to lender requests.

Refinancing typically causes a temporary, minor decrease in your credit score (usually 5-10 points) due to the hard credit inquiry. However, this impact is minimal and temporary. Multiple mortgage inquiries within a 14-45 day window count as a single inquiry, so shop around freely during this period.

Your score should recover within a few months. Long-term, refinancing can actually improve your credit by lowering your debt-to-income ratio if you reduce your monthly payment, and maintaining on-time payments on your new loan will continue building positive credit history.

Switching to a 15-year mortgage can save substantial interest over the loan's life and typically offers rates 0.25-0.75% lower than 30-year loans. However, monthly payments increase significantly (often 40-50% higher).

This strategy works best if you have stable income, minimal other debt, and adequate emergency savings. Consider your financial flexibility: can you comfortably afford the higher payment during economic uncertainty? Alternatively, you could keep a 30-year loan and make extra principal payments, maintaining payment flexibility while still reducing interest costs.

Gather these essential documents before applying: Recent pay stubs (2 months), tax returns with all schedules (2 years), W-2s (2 years), bank statements (2-3 months), current mortgage statement, homeowners insurance policy, and recent property tax bill.

Self-employed borrowers need additional documentation: profit & loss statements, business tax returns, and possibly bank statements for business accounts. Having these ready upfront prevents delays and demonstrates your preparedness to lenders, potentially improving your rate and terms.