Top mistakes: ignoring the break-even, resetting a nearly paid-off loan to 30 years, rolling in too many costs, and chasing a tiny rate drop that never recoups.
Math mistakes
The classic error is refinancing without checking the break-even, or resetting a loan you’ve nearly paid off to a fresh 30-year term — which can add interest even at a lower rate. Consider a shorter new term to avoid this.
Cost and timing mistakes
Rolling in every cost inflates the balance; chasing a rate drop too small to recoup the fees wastes money if you move first. We pressure-test the numbers so the refinance actually pays.
Frequently asked questions
How small a rate drop is worth it?
There’s no fixed rule — it depends on your balance and how long you’ll stay. The break-even calculation answers it precisely.
Should I always take the lowest rate?
Not if it requires expensive points you won’t recoup, or resets your term unfavorably. Total cost matters more than the rate alone.
Is a no-cost refinance a gimmick?
No — it trades a slightly higher rate for lower up-front cost. For shorter horizons it can be the better deal.
Save Financial is a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766). Figures are illustrative for 2026 and not an offer of credit.