Picture of Ryan Doughty If you’re like most people, once you’ve bought a new home and are moved in and settled, you don’t think much about your mortgage. You know how much you pay each month and probably remember your interest rate. But do you know when it’s time to consider changing your mortgage? Or how? Did you even know that was possible?

Mortgage refinancing is your opportunity to take advantage of lower interest rates, lower payments, a reduced loan term and more. 

It’s important to note here that home refinancing is not for everyone. That’s why you should meet with a mortgage loan officer who can walk you through your specific financial circumstances and provide the insight you need to make the best decision.

Before you begin, here are some of the more general refinancing questions often asked—starting with, “what is it?”

What is refinancing?

When you refinance your mortgage, you are essentially paying off your existing mortgage and replacing it with a new one. You’ll start with a new application with updated information like employment, income, assets, credit scores and a current valuation of your home (called an appraisal). Typically, homebuyers decide to refinance because rates have fallen (and they want to reduce their monthly payment), they want to switch from an adjustable rate to a fixed rate, possibly reduce their remaining loan term, or pull some “cash out” of their home’s equity to consolidate debt or make home improvements. Sometimes it’s a combination of some or all of these! 

How do I know if refinancing is right for me?

If you’re beginning to consider refinancing, our calculator can help with some basic numbers. Once you’re ready to examine your options more closely, you’ll want to talk to a mortgage loan officer. Together, you’ll consider several aspects, such as your current financial situation and credit score, how long you plan to stay in your home, your home’s current anticipated value, your current interest rate and the new interest rate you would qualify for. It is important to know that refinancing can sometimes have closing costs associated with the new loan, which can be paid out of pocket or rolled-in to the new loan. The goal is for you to see an obvious benefit in the refinance once any costs are considered.

Does it make sense to refinance?

Our refinancing calculator can help you determine how long it will take for you to recover closing costs and break even.

Will refinancing hurt my credit score?

Whenever your credit is checked by a financial institution, it can cause a dip in your credit score. So, when you apply for your new mortgage, you may see a temporary dip in your score. The benefits of your new loan should outweigh this brief dip.

Do I have to refinance with the same bank?

Absolutely not. Just as you had a choice in who to use for your initial mortgage, take the time to shop for your refinance. We live in a great time to be a consumer with more information than ever available to make a great decision. You’ll just want to make sure your lender is legitimate, trustworthy, ethical and knowledgeable—and willing to walk you through the process. You can find a nearby Old National mortgage loan officer here.

Are there different types of refinancing?

There are. Institutions like Old National have two main options: a Standard Mortgage Refinance or a Quick Home Refi, each has benefits and drawbacks and is best suited for a particular set of circumstances.  Again, talking with a trusted Mortgage Loan Officer will help you determine which option is best for you based on your individual situation. 
Ryan has been a Residential Mortgage Loan Officer since 1996. He prides himself in taking good care of his clients and ensuring that they fully understand all aspects of the mortgage process. He regularly leads seminars for businesses and individuals focusing on real estate financing, the first-time home buying process and new construction financing.

This content is not intended to provide legal, tax, accounting, financial or investment advice or indicate the suitability of any product or service for your unique circumstances. You are encouraged to consult with a qualified legal, tax, accounting, financial or investment professional based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.