A refinance replaces your current mortgage with a new one. People do it to change the rate, shorten the term, drop mortgage insurance, or take cash out. Those are different goals. A worksheet that only shows a lower monthly payment is not finished.
The break-even
Closing costs are real money: lender fees, title, and often an appraisal. If the new payment is $150 lower and costs are $4,500, you need about 30 months before the monthly savings have paid for the refinance. If you might move before then, the lower payment can be a loss. The refinance calculator does this sketch when you type both rates and the costs. It is not a Loan Estimate.
The term
If you have 18 years left and you refinance into a new 30-year loan, the payment often drops even when the rate barely moves, because you stretched the debt. You may pay more interest over the life of the loan. Ask for the total interest on the current loan if you keep it, and the total interest on the new one. If the new loan wins on the payment and loses on the interest, say so out loud and decide on purpose.
A shorter term does the opposite. The payment may rise. The interest falls. That is a fine reason to refinance. It is not a failure of the quote.
Cash-out is a bigger loan
Taking cash out pays off the old mortgage and leaves you owing more, with the house as collateral. Using it to clear high-interest debt can be sensible. Using it to clear high-interest debt and then running the cards back up is how people lose a house over a kitchen. If debt consolidation is the point, the closing instructions should show those accounts being paid. And the habit has to change, or the mortgage was just a larger credit card.
What to bring to the call
The latest mortgage statement, the rate, the payment, and roughly what you think the home is worth. If your servicer already sent a “stay with us” offer, bring that too. Sometimes they are competitive. Sometimes they are counting on you not to check. Start with a note or call. We shop at no charge to you. The lender’s fees, if you proceed, show up in writing before you are committed.
General education from Freedom Family Mortgage. Not a rate quote, not tax advice, and not a commitment to lend.