Module 5: Refinancing Strategies

Refinancing is one of the most powerful tools homeowners have for optimizing their mortgage — but only when done strategically. 'My neighbor got a lower rate' is not an analysis.

The Break-Even Framework

Every refinance has costs (typically $4,000–$12,000). Divide total closing costs by monthly savings to find your break-even in months. If you'll stay longer than break-even, refinancing saves money. If you'll move before break-even, it costs money.

Good Reasons to Refinance

• Rate dropped 0.75%+ and you'll stay past break-even.
• Switching from ARM to fixed for payment certainty.
• Shortening term (30 to 15 year) to save interest and build equity faster.
• Removing PMI after reaching 20% equity (via appraisal-supported refi).
• Cash-out for high-ROI home improvement that raises property value.