What to expect when refinancing your home? It’s a very common question — so don’t worry about asking it. While refinancing is an all too familiar in the real estate and banking world, it’s usually confounding and confusing to the average person. Read on to learn more about what to expect when refinancing your home.

What to expect when refinancing your home starts with a basic understanding of the process. 

First of all, refinancing is not redoing or modifying an existing mortgage. Let’s repeat that because it’s extraordinarily important — refinancing is not redoing or modifying an existing mortgage. It is, however, taking out an entirely new mortgage.

Second, the refinancing process is very much like getting a home loan. In fact, it’s almost the same thing. The house will be appraised, there’s a credit check, closing costs are involved, and other familiar factors are likewise present.

Third, refinancing also means costs are incurred by the borrower — including things like closing costs. 

If you are considering refinancing, you should be prepared to stay put in your house for at least three to five years. This is usually the amount of time it takes to recoup the money spent to make it worthwhile.

And, just like getting a mortgage, you need to shop around in order to find the best terms, interest rate, closing costs, and more.

As you can see, there’s much to understand what’s involved in refinancing your home. So, be sure to do your homework before entering the process.