Latest credit report for March 31, 2026 | Good luck

Current refi refi data

Note that Good luck reviewed the latest Zillow data available as of March 30.

How mortgage refinancing works

Mortgage refinancing involves replacing your existing home loan with a new one. As with your first mortgage application, you will need to apply and meet lender criteria, including your credit score, income verification, debt-to-income (DTI) ratio and more.

This process often results in a slight decrease in your credit score due to hard inquiries, and there is a risk of rejection if you do not meet the lender’s requirements.

What is happening to mortgage rates in today’s market?

Some observers hoped that mortgage rates would decrease after the Federal Reserve reduced the federal funds rate by the end of 2024. However, mortgage rates remained stubbornly close to the 7% mark for 30-year, fixed loans nationwide.

Although rates have fallen slightly in late February, approaching 6.5%, they are still significantly higher than the pandemic lows of 2% and 3%. As of the third quarter of 2024, 82.8% of homeowners with mortgages had rates below 6%, according to a Redfin report. That means a large number of homeowners are locked out, unwilling or unable to move or renew at the current high rates.

However, homeowners were relieved starting in late August and early September 2025, when mortgage rates began to fall ahead of the Sept. 16-17 Fed. They fell to the lowest level seen in nearly a year, and the Fed delivered an expected quarterly cut in the federal funds rate. The central bank followed up with a second cut of the same amount at its October meeting and a third (also equal) in early December.

It may not make sense to refinance your mortgage

Refinancing is free, so it’s important to check the costs before applying for a refi.

The most common guideline you’ll hear is that financing makes sense if you can secure a rate that’s a full percentage point below your current rate. For example, if you have a 7% loan, refinancing when you can get a 6% rate can be a smart move to keep interest rates down over the life of your loan.

You can also consider a cash out process in order to use home equity – which usually requires at least 20% of the equity in your home. Homeowners have more freedom to use the money from the refi as they like, as there are usually no restrictions on what you can do with the cash-out portion of the refi. For example, you are free to invest the funds, use them to pay down the purchase of a vacation home or rental property, or pay off credit card debt.

Refinancing can also allow you to change the term of your loan. For example, someone took out a 15-year loan but found that their budget is stretched and could benefit from switching to a 30-year term for a lower monthly payment.

And, refinancing can be a way to change loan types, such as from an FHA loan to a conventional loan to eliminate your need for the FHA loan’s lifetime mortgage insurance (MIP), or from an adjustable rate loan (ARM) to a fixed rate loan.

The cost of refinancing your loan

Refinancing includes closing costs, usually from 2% to 6% of the loan amount. For a $300,000 loan, you could pay between $6,000 and $18,000, for example. Some common expenses include:

• Loan origination fees.
• Inspection fees.
• Title search fees and insurance.
• Loan application fees.
• Research fees.
• Attorney’s fees (if required in your jurisdiction).
• Recording fees.
• Prepayment penalties (if they apply to your current loan).

Different types of mortgage refi loans

There are many different types of mortgage refinance loans out there, and the right one for your needs will depend on your goals and the type of loan you currently have. Here are some common refi options:

• Refinance and time: This is probably the most popular type of refi. It helps you lower your interest rate and/or change the term of your loan. Be aware that if you opt for a shorter term, while that usually gets you a lower rate and saves you more interest for life, you will always pay a higher monthly mortgage payment.
• Spending: The money from a cashout refi lowers your home equity by putting in a new, bigger loan and taking out the difference. You can use the money for many different purposes, including home improvement, high-interest debt consolidation, or other financial goals.
• Non-closing financial transactions: With this type of refi, the lender pays the closing costs in exchange for charging a higher interest rate. If you don’t have the money to pay for closing costs, and you could benefit from a refinance, this option may be worth exploring.
• Facilitate financial development: These refis are for FHA, VA and USDA loan lenders, and generally involve less paperwork as well as a more streamlined application and approval process.

Cashback with your lender against a new one

You don’t have to refinance with your lender, and shopping around can help you get the lowest interest rate you can get, and possibly the best service.

However, your existing lender may offer incentives, such as waiving closing costs, if you stay with them. So you should at least discuss the issue with your current provider.

Also, know that if your loan is bought by Fannie Mae or Freddie Mac, you may be eligible for programs like Refi Now and Refi Possible.