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Refinancing vs. Selling Your Home

If you’re determined to get a new mortgage, refinancing is a relatively convenient option—but it may not be the best one for you. If you’re willing to move and go house hunting again, selling your property could be more profitable in the long run. Read on for help with deciding which course of action you should pursue.

What They Have in Common

Both refinancing and selling present an opportunity to get a new loan with more favorable terms. You can lower your interest rate and monthly payment, change the length of the loan, or switch from a fixed- to variable-rate mortgage. In both cases, your property will need an appraisal, and you’ll need to be in good financial health—keep an eye on your credit score, DTI, etc.

When Selling Your Home is Better

Selling may be a better option than refinancing if:

  • Your Property Value Has Increased 
    If you’ve been paying your mortgage steadily for years, increasing your equity, and the property value has gone up significantly, selling could net you a major cash boost.
  • You’re Willing to Move 
    Not all decisions are financially motivated. If you like your home and neighborhood and you expect to stay for at least five years, refinancing is the better choice. However, if you’re ready for a new environment (or this is a good time to downsize), selling may afford you more opportunities.
  • You Have More Time
    Refinancing certainly takes time and effort, but selling comes with additional responsibilities. For example, you’ll have to find an agent, search for a new house, and put more money and energy into repairing issues with your property. If now isn’t a great time for extra commitments, refinancing should be a simpler way to get a new loan.

Still not sure whether selling or refinancing is the right avenue for you? Ask your loan officer—they’ll review your current situation with you in detail and guide you toward the best way to go.

Contact a Loan Originator Today!