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Mortgage Refinance

Adjusting Loans For Changing Needs

If you have a mortgage and are looking to lower your rate or shorten your term, refinancing might be a smart option for you.

Multi-ethnic couple planning their home budget.

How Does Mortgage Refinancing Work?

First Source can help you reduce your monthly mortgage payments, lower your interest rates, or shorten your term by refinancing your current mortgage. Much like obtaining your original mortgage, refinancing follows a similar underwriting, documentation, appraisal, and attorney closing  process.


Advantages Of Mortgage Refinancing

Depending on your financial situation, there may be benefits to refinancing your mortgage. Our Mortgage Team will go over your specific situation to see which of these advantages may apply:

  • Reduced terms and length of loan - this will help you pay off your mortgage faster without necessarily having to increase your monthly payments

  • Lower interest rates - this can have a significant impact on your monthly payments, saving you hundreds of dollars per year

  • Improved credit rating - payments may be more affordable and paying loan payments on time can increase your credit score

  • Debt consolidation - you can consolidate multiple loans when refinancing, which allows you to make fixed payments over a set period instead of paying a revolving balance

  • Improvements to current home - the appraisal on your home during the refinancing process can influence equity prices, which you may be able to take advantage of for home improvement projects


When Should You Refinance Your Mortgage?

There are several factors that help determine when you should refinance your mortgage. These include the current refinance interest rates, your credit score, how long you plan to live in your home, and your financial situation over that same period of time. If those factors align, you could end up paying your home off sooner and pay off other debt to improve your finances and credit.


Are There Times When You Shouldn’t Refinance Your Mortgage?

If you have a good interest rate currently, it would probably be best to avoid refinancing. Putting yourself through the home buying process could create a longer break-even period with the closing costs, and wouldn’t justify the overall savings.

If you plan on leaving your current home within the year, you would not want to refinance. Save that process for when looking for your next home.

If you cannot afford paying off the closing costs when refinancing into a new loan, you would not want to refinance at that time. Ideally, you want to save ahead of time and be prepared for the closing costs because if you roll them into the loan, you will have to pay interest on those costs for the length of the loan. Also, paying off the closing costs right away keeps the interest rate lower on the loan. 


Home Equity vs. Mortgage Refinance

While both home equity loans and mortgage refinancing give you a way to save, usually only one is better for your specific situation. The determining factors on how much you would save, and therefore which one to choose are: what you would be using the money for, how much your equity is worth, and how long you plan to live in your home. 

Rates, closing costs, and the life of the loans are different for each. Home equity loans are generally shorter than mortgage loans and may be more widely available for those with lower credit scores. However, refinancing can potentially save you thousands of dollars when paying off your home.

Our Mortgage Team can help walk you through each to help determine which would be best for your specific needs.


Is Refinancing Right For You?

We’re prepared to help navigate you through the mortgage refinancing process, no matter what your goals are. If you’re not ready to apply for a Mortgage loan, you might want to consider scheduling an introductory discovery call with one of our Mortgage Team representatives. Simply click on the button below, select the “Apply for a Loan” service from the menu and choose the “Mortgage Services” option.


Looking For More Information?

Check out our Online Mortgage Center for helpful tips and if you’re ready, you can start the application process right here.

You’ll also find today’s mortgage rates, the ability to check the status of your loan, and answers to just about any question that you may have about mortgages.

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*Annual percentage rate
Mortgages in New York State only. Information is based on a loan amount of $160,000, credit score above 740, and loan-to-value at or below 60%. Your actual annual percentage rate may be different. All rates are subject to change without notice.

If an escrow account is required or requested, the actual payment will also include amounts for real estate taxes and homeowner's insurance premiums.

Rates are based on a purchase or no cash out refinance, cash out options may affect your rate.

First Source credit and membership eligibility requirements apply. 

Mortgage products are offered by our Mortgage Team, Homeowners Advantage (HOA), which is a subsidiary of CAP COM FCU. HOA is a licensed Mortgage Banker – NYS Dept. of Financial Services. HOA NMLS Identifier: 290363. Principal Address: 4 Winners Circle, Albany, NY 12205. CAP COM FCU NMLS Identifier: 401261.