Four Reasons You Shouldn’t Refinance

Why It Matters

Refinancing can lower payments but also add years and hundreds of thousands in interest or saddle a home with unsecured spending; understanding break-even timing and alternatives prevents costly mistakes and protects home equity.

Summary

A mortgage adviser warns that not every refinance improves your finances and outlines four clear situations to avoid it. Don’t refinance if your current rate is below about 4% to cover relatively small needs (use a HELOC instead), if you plan to move within one to three years because closing costs often wipe out savings, if you’d extend the loan term just to lower monthly payments and dramatically increase total interest, or if you’re cashing out for nonessential spending. He urges borrowers to test refinances against their rate, equity, timeline and goals before proceeding.