Should I Wait for Rates to Go Down More in 2025, or Should I Refinance Multiple Times?
Deciding whether to refinance your mortgage now or wait for rates to drop further can feel like a gamble. While chasing the "perfect" rate may seem tempting, it’s often better to act when the savings outweigh the costs. For example, refinancing from 6.5% to 5.5% today could save you $300 a month—savings you’d miss out on if you wait too long. And yes, refinancing multiple times is an option, but it’s important to weigh closing costs and long-term goals.Not sure what makes sense for you? Contact an expert at AFM to help you navigate your options and lock in savings. Why wait to make your mortgage work for you? Let AFM guide the way!
Can You Refinance Multiple Times?
The short answer is yes, you can refinance multiple times. However, whether you should is a different story. Every time you refinance, you’ll need to consider the costs:
- Closing Costs: Refinancing isn’t free. Lender fees, title services, and other closing costs can range from 2-5% of your loan amount. So, if you refinance too frequently, those costs could eat away at your potential savings.
- Credit Score Impact: Each refinance triggers a hard inquiry on your credit, which could temporarily lower your score. While this isn’t a deal-breaker for most homeowners, it’s something to keep in mind.
- Time to Break Even: When you refinance, it takes time to recoup the upfront costs with your monthly savings. For instance, if refinancing saves you $200 a month but costs $6,000 in closing fees, it’ll take 30 months (2.5 years) to break even.
Here’s a quick example:
- Suppose you refinanced in 2022 at 6.0% but now rates have dropped to 5.0%. If your closing costs are reasonable and you plan to stay in your home long enough to recoup them, refinancing again might be worth it. But refinancing a third time if rates drop slightly lower might not make financial sense unless the drop is significant.
When It’s Better to Act Now
Waiting for the perfect rate often means you’re gambling on a future no one can predict. Experts recommend refinancing if you meet these conditions:
- You can lower your interest rate by at least 1.0% (e.g., going from 6% to 5%).
- You plan to stay in your home long enough to break even on closing costs.
- You have a clear financial goal—whether it’s reducing your monthly payment, switching to a shorter loan term, or consolidating debt.
Example: Let’s go back to our earlier scenario. If rates drop from 6.5% to 5.5% today, you’ll save $300 a month. Even if rates drop to 5.0% later, you’ve already started saving, and you can decide if refinancing again makes sense at that time. In most cases, capturing today's savings is better than endlessly chasing tomorrow's "what-ifs."
How AFM Can Help
If you’re feeling overwhelmed by these decisions, don’t worry—you don’t have to navigate this alone. At AFM, we specialize in helping homeowners like you weigh the pros and cons of refinancing, evaluate current rates, and decide what makes the most financial sense for your unique situation.
When you work with an expert at AFM, you get:
- Personalized advice: We’ll help you understand whether it’s better to refinance now or wait.
- Transparency: We’ll break down the costs so you know exactly when you’ll see savings.
- Market insight: Rates can be unpredictable, but our team keeps a close eye on trends and opportunities so you don’t have to.
Conclusion: Don’t Wait for Perfection—Act When It Makes Sense
Refinancing your mortgage isn’t about timing the market perfectly—it’s about taking action when the benefits outweigh the costs. Whether you choose to refinance now or wait depends on your personal financial situation, how long you plan to stay in your home, and how much rates change over time.
And remember, you don’t have to go it alone. Contact an expert at AFM to explore your refinancing options and find the solution that works best for you.
Why wait to start saving? Reach out to AFM today!