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Mortgages Made Simple

Step 1: Should You Refinance?
Step 2: Choosing a New Mortgage
Step 3: Comparing Rates and Costs
Step 4: The Closing Process


Should You Refinance?
Not sure if refinancing is right for you? Learn about the important issues you should consider and discuss with your lender before making the big decision.

Not sure if refinancing is right for you? Learn about the important issues you should consider and discuss with your lender before you make the big decision.

Most Common Reasons for Refinancing
Most homeowners refinance their mortgage to get a lower interest rate which translates into lower payments and/or a shortened payoff term.

Some other benefits to refinancing include "locking in" a low interest rate for the life of the loan, consolidating debt outside your mortgage into one payment, or changing the type of mortgage you have to one that better suits your finances.

Refinancing Basics
Some homeowners may not fully understand what the refinancing process entails. When you refinance your home, you are applying for a new mortgage and using the loan you receive to pay off your current mortgage.

Often, you will go through most of the same steps you went through when you received your home’s current mortgage, including the loan application process, credit checks, appraisals and the closing. That means you’ll also face most of the fees and upfront costs you paid during the original mortgage process.

In most cases, homeowners will see the greatest benefits from refinancing if they plan to stay in their home for many years to come. In addition, homeowners who have already built some equity in their current home also often see the biggest advantages from refinancing.

Refinancing Costs and Fees
Because the refinancing process is essentially applying for a mortgage all over again, you may be required to pay the same fees for application and processing services that you paid when you received your current mortgage. Some of these fees may include:

  • Title search and title insurance costs
  • Application fee
  • Appraisal fee
  • Loan processing fees
  • Points
  • Closing agent fees
  • Early repayment penalties


It’s very important to carefully consider the costs associated with the refinancing process, as it is possible for the fees to reach an amount that cancel out the long-term benefits of receiving a lower interest rate. You should always speak with a loan professional before deciding to refinance, so you can feel confident about your decision to follow through or decline the refinancing option.

Use Virtua's online Refinancing Calculator to get an idea of the changes you might see in your mortgage by refinancing.