Common mistakes people make when refinancing
Skipping the break-even calculation. If you move before you hit break-even, the refinance can end up costing more than it saves.
Resetting the clock back to 30 years. Refinancing into a new 30-year term after years of payments can lower your monthly payment but extend the total time — and total interest — it takes to be mortgage-free.
Rolling closing costs in quietly. Closing costs (typically 2–5% of the loan) either come out of pocket or get added to the new balance. Rolling them in increases what you owe even if the payment looks similar.
Chasing a marginal rate drop. A 0.25% rate cut rarely covers closing costs fast enough to be worth it. Most lenders look for at least a 0.5–1% improvement before it's clearly worthwhile.
Not shopping more than one lender. Your current lender's refinance offer is rarely the best one available — rate and closing costs both vary meaningfully between lenders for the same loan.