The Refinancing Boom Continues in 2020

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We have good news from the home-ownership front.

Like last year, 2020 is shaping up to be an ideal year for homeowners to consider refinancing their mortgages.
The refinancing boom of 2019 is continuing, with the consumer-friendly reality of lower interest rates that could save you money on your monthly mortgage payment, as well as over the life of your loan.

So, what do you need to know about refinancing?

Refinancing means you pay off your original home mortgage loan and replace it with a new one. This only makes sense for you if the refinancing terms are more favorable than your original loan’s terms. Experts agree that, typically, a decreased interest rate of just one percentage point could make refinancing financially worth it to you.

The refinancing process is similar to the process of applying for the original mortgage loan, including costs related to a home appraisal, title search, and application fee. 


Refinancing might make sense for you if:

  • Your original mortgage is only a few years old. The refinancing interests rates we’re seeing today, beginning in 2019, are lower than mortgage interest rates from even a couple of years ago.
  • You currently have a 30-year mortgage. Refinancing with a 15-year or 20-year repayment term could save you years’ worth of interest expenses, often with only a negligible modification to your monthly mortgage payment.
  • You currently have an adjustable-rate mortgage (ARM). Even though the early years of an ARM have low interest rates, those rates start to go up as time goes by. This makes your monthly payment higher and potentially slows down the pace at which you earn equity in your home. By refinancing with a fixed-rate mortgage, your monthly payment would become static – combine that with a lower interest rate and you could save a substantial amount of money over the life of the loan. This makes great sense for people who are committed to the home and neighborhood they are currently in.
  • Your credit score has recently changed for the better. Higher credit scores typically lead to more favorable interest rates. Improving your credit score takes dedication, so lowering your mortgage costs by refinancing at a better rate would be a nice reward for your hard work.


Now might not be the right time for you to refinance if:

  • You are planning to leave your home this year or within a couple of years. The fees associated with refinancing may not make the lower interest rate financially worth it to you, as lower interest rates and shorter repayment periods offer the most benefit over time. If this describes you, and you are remaining in the greater Memphis area, one of our mortgage officers would be delighted to help you with a mortgage for your future home. 
  • You’re close to paying off your home. The fees associated with refinancing may outweigh the benefit of a lower interest rate if the lower rate doesn’t have time to fully realize cost savings for you. If this is you, congratulations on nearly paying off your mortgage loan!


As you ignite your new year and think about the goals you have ahead of you, we invite you to run the numbers with one of our mortgage officers to see if refinancing your home now makes sense for you. Contact a member of our team to get started.


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Bank of Bartlett NMLS # 418439. Bartlett Mortgage NMLS # 418443.


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