When to Refinance a Mortgage - Education Resources | Muncy Bank & Trust - Serving Lycoming County, PA Since 1893

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Education Resources from The Muncy Bank & Trust Company

Click below to read guides, articles and educational resources designed to help you plan for your financial future and understand our banking products & services. Want to learn more? Contact The Muncy Bank & Trust today by calling 570.546.2211 or by visiting one of our locations!

When to Refinance a Mortgage

Posted on 2/3/2021 by in loans mortgage

Mortgage rates are low, which may make this the best time to refinance your mortgage. Here's how to determine whether you should consider refinancing your mortgage.


If you’re like most homeowners, your mortgage accounts for the majority of your household debt. When you first purchased your home, you calculated how much house you could afford and found the best interest rate for your home loan. Depending on how long you’ve owned your house, you might be surprised to find that interest rates have changed. 

What are today’s mortgage refinance rates? The changing economy has brought mortgage rates to a new low. As your community lender, Muncy Bank wants you to know that you’re not stuck in your old mortgage. Mortgage refinancing is simply taking out a new mortgage and closing your old mortgage loan. We’re here to show you how to refinance a mortgage and help you decide if it’s the right move for you.

Mortgage refinancing is simply taking out a new mortgage and closing your old mortgage loan. - Couple meeting with a mortgage lender

When does it make sense to refinance?

There are a number of reasons to consider refinancing. At Muncy Bank, we recommend speaking with one of our qualified mortgage lenders if you find yourself in any of the following situations.

Lower Mortgage Rates Available 

If refinance mortgage rates have fallen significantly, there is a good chance you can sign a new loan with a lower rate.

Improved Credit Score

If your credit score has improved since you purchased your home, you may be eligible for a lower interest rate even if the average rate hasn’t changed much.

Greater Income

Similar to improving your credit score, an increase in your household income and your debt/income ratio can yield a lower interest rate on a refinanced loan. 

Increased Home Value

If the value of your house has increased, you can refinance your loan with a cash-out refinance. A cash-out refinance allows you to take out a new loan for a portion of your home’s current value. The difference between your current mortgage balance and your new loan is yours to keep as cash. 

Eliminate Mortgage Insurance 

Some loans have mortgage insurance premiums built into the life of the loan. If your income and savings have improved since your home purchase, you may qualify for a mortgage loan where you don’t have to pay mortgage insurance.  

How much does it cost to refinance a mortgage?

It’s easy to assume that lower mortgage rates will automatically save you money. Depending on when you signed your first mortgage, you may have forgotten about all the fees and costs associated with a loan closing. In order to save money in the long run, you need to take into account what it will cost to sign a new mortgage loan.

The costs associated with refinancing a mortgage will vary depending on your loan amount, lender, location, credit score, and new loan term. The following is a breakdown of typical mortgage refinancing fees.

Loan Origination Fee: Also called the underwriting fee or processing fee, this is what your lender charges for writing and processing the new loan. 

Appraisal Fee: In order to refinance your loan, your bank will hire an appraiser to assess the current property value. 

Prepaid Interest Charges: Some lenders may require you to pay the first month’s interest charges upfront during the loan closing.

Recording Fee: The cost of officially recording the new loan with your county can vary by location. 

Title Insurance Fee: Your new loan requires a new title insurance policy. 

Credit Report Fee: Your lender will pull your credit report as part of the mortgage loan process.  

On average, you can expect to spend 2% to 6% of your new loan amount on refinance-related fees - Loan application with the word "Approved" and a set of keys, a calculator and a mini house

Should I refinance my house?

The decision to refinance your mortgage requires a good look at your current mortgage loan and financial situation. You should also consider how many more years you intend to live in your house. Muncy Bank can help you review your situation and explore your refinancing options. Our refinancing calculator is available online 24/7, and our mortgage lending team is available to talk over the phone or by appointment. 

If you’re looking for local mortgage refinancing in Lycoming, Northumberland, or Clinton County, Muncy Bank has friendly and knowledgeable lenders waiting to assist you. Our customers appreciate our long history, friendly service, and our willingness to help homeowners throughout the home refinancing process. We offer a variety of home loans and can help you decide when to refinance. Contact us online or stop in one of our locations in Muncy, Clarkstown, Hughesville, Dewart, Montoursville, Montgomery, Linden or Avis to discuss your mortgage refinance needs today.

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