Generally speaking, refinancing your mortgage can be a good idea when today's interest rates are significantly lower than the rate on your current mortgage.

That's because you want the savings from refinancing, over time, to be worth it after you pay the refinance closing costs.

One way to decide if refinancing makes sense is to calculate a break even point, which is when your savings are equal to your costs. For example, if your closing costs are $2,400, and you're saving $100 per month on your new loan, it will take two years (24 months x $100 per month) to break even.

Refinancing can be a good idea when you reach your break-even point quickly or when you plan to live in your home for many years. You can apply the savings to lower your monthly payment or pay off your mortgage more quickly.

When you refinance, you can also change the number of years you have to pay off your mortgage, switch from an adjustable-rate to a fixed-rate mortgage, and more. Learn about reasons to refinance.

You must pay off your current mortgage and replace it with a new mortgage that has better rates or terms to refinance your home with a Conventional loan.

You'll need to complete a new mortgage application, submit documents, sign disclosures, and attend the closing. You'll also need to meet our requirements to get approved. These include:

• Current payments. In most cases, you need to be current on your mortgage, with no recent late payments, to qualify for refinancing.
• Credit score. You typically need a credit score of 620 or better to refinance a Conventional loan at Freedom Mortgage.
• Debt-to-income ratio (DTI). You often need a maximum DTI between 36% and 41% to refinance with a Conventional loan. Learn more about debt-to-income ratios.
• Private mortgage insurance (PMI). You'll need to pay PMI when the value of your home's equity is less than 20%. If the value of your equity is more than 20%, you won't need to pay PMI.
• Home appraisal. We usually require a new home appraisal to estimate the current value of your home. Learn more about home appraisals.
• Title search. Title searches look for liens or other financial claims on your home that can affect your refinancing approval. Learn more about title searches.
• Closing costs. You might pay between 2% to 6% of the loan amount in closing costs when you refinance, according to Forbes. Sometimes, you can finance closing costs into your loan amount. Other times, you may need to pay them in cash at closing.

Freedom Mortgage's experienced Loan Advisors will work with you to make every step of refinancing your home simpler and hassle-free. Learn more about our mortgage application process.

The mortgage refinance rate we may be able to offer is personal to you. Your interest rate is affected by the type of refinance loan you want, your credit score, your income, and finances, as well as the current mortgage market environment.

Freedom Mortgage may be able to offer you a refinance rate that is lower—or higher—than the rate you see advertised by other lenders. Ask us today what refinance rate we can offer you by calling 877-220-5533.