How to Evaluate a Mortgage Refinance
March 13, 2026
When is the right time to refinance?
It’s a question anyone with a mortgage may find themselves asking at some point.
“Members will call in to us and ask that question,” said UnitedOne Credit Union Mortgage Specialist Julie Peot, NMLS # 441412. “But I find myself asking a question back to them, ‘What is your goal?’”
Without clarity on the purpose, it’s difficult to determine whether refinancing makes sense.
UnitedOne’s Local Home Loan Experts discuss the factors to look at if you’re considering refinancing on the latest episode of their podcast, “At Home on the Lakeshore.”
Many people assume refinancing is only about securing a lower interest rate, but motivations vary widely. Some borrowers want to reduce their monthly payment, others want to shorten their loan term, and some want to consolidate high-interest debt.
Since every homeowner’s situation is unique, an excellent resource to help determine if you can meet your goals by refinancing is UnitedOne’s Mortgage Calculators.
“There are different ways we can use it,” Peot said. “Here’s closing costs. Here was your original loan amount. This is what you want to refinance. This is what your original rate was. This is what the new rate is, and then a break-even point.”
If it will take two years to recoup the costs and you plan to stay in the home long-term, refinancing may be worthwhile. But if a move is on the horizon, the savings may never materialize.
Another key factor in determining to refinance or not is where you stand in your amortization schedule.
Mortgage interest is front-loaded, meaning you pay more interest early in the loan and more principal later. If you’re deep into your current mortgage, starting over could cost more in the long run.
“You might have less interest to pay leaving it alone than by refinancing it,” said UnitedOne Mortgage Specialist Kari Johnsrud, NMLS # 441414, who suggests running an amortization comparison to reveal if refinancing would be a cost-effective choice.
Loan type also plays a role when deciding to refinance.
“If you're in an FHA (Federal Housing Administration) and your credit has improved or your situation has improved, you could look at refinancing into a conventional,” said UnitedOne
Mortgage Specialist Marla Hitsman, NMLS # 2696821. “That way you can avoid paying the private mortgage insurance as well as maybe lower the rate.”
Refinancing can be used as a strategic tool for debt consolidation as well. Even if the new mortgage rate is higher than your current one, rolling high-interest credit card balances into a mortgage can still be beneficial.
“It sounds like a lot going up from 3% to 5.75% (interest rate on a home loan),” Peot said. “But when you're coming down from a debt consolidation and you're paying 25% (interest rate on credit cards), the 5.75% isn't that bad locked in.”
Ultimately, mortgage rates fluctuate daily, and timing the market perfectly is nearly impossible when you’re looking to refinance.
That’s why UnitedOne’s Local Home Loan Experts emphasize focusing on your personal goals rather than chasing every market movement.
“Having a focus or a goal on what that refinance looks like for you is a great starting point,” Hitsman said.
Whether you’re looking to refinance or a first-time homebuyer, UnitedOne’s Local Home Loan Experts can help point you in the right direction with all of your home loan needs.