Mortgage Refinancing

Make your mortgage work better for you.

Adjust your mortgage terms

Consolidate eligible debt

Explore your mortgage refinancing options.

The mortgage that worked when you purchased your home may not always fit your finances or future plans. Refinancing replaces your current mortgage with a new loan, giving you an opportunity to change its rate, term, payment structure or loan amount.

Whether you want to adjust your monthly payment, pay off your home sooner, access available equity or consolidate eligible debt, a Michigan First Mortgage Loan Officer can help you compare your options and understand the potential costs and benefits.

What is Mortgage Refinancing?

Refinancing is the process of replacing your existing mortgage with a new one. The new mortgage pays off your current home loan, and you begin making payments according to the new rate, term and conditions.

You can refinance a mortgage currently held by Michigan First or another lender, subject to eligibility and applicable program requirements.

Because refinancing creates a new mortgage, it generally involves an application, financial documentation, an appraisal or other property valuation, underwriting and closing costs. The potential long-term benefit should be considered alongside these upfront expenses.

Why for homeowners refinance?

Your reason for refinancing should help determine which mortgage option and repayment term you consider.

Change Your Interest Rate

A lower rate could reduce the amount of interest you pay or lower your monthly principal-and-interest payment. The rate available to you will depend on current market conditions, the selected mortgage and your financial qualifications.

Adjust Your Monthly Payment

Refinancing into a longer repayment term may reduce your required monthly principal-and-interest payment. However, extending the loan term could increase the total amount of interest paid over time.

Pay Off Your Mortgage Sooner

Choosing a shorter mortgage term may help you build equity faster and reduce total interest costs. A shorter term will often result in a higher monthly payment, even when the new interest rate is lower.

Move to a Different Loan Structure

You may decide to move from an adjustable-rate mortgage to a fixed-rate mortgage for a more predictable principal-and-interest payment—or explore an adjustable-rate option if it better supports your plans.

Access Available Home Equity

A cash-out refinance allows an eligible homeowner to replace an existing mortgage with a larger loan and receive a portion of the difference in cash.

Consolidate Eligible Debt

Funds from a cash-out refinance may be used to pay off qualifying higher-interest debt. This can simplify monthly payments and potentially reduce the interest rate applied to that debt, but it also converts the debt into an obligation secured by your home.

Rate-and-Term Refinancing

A rate-and-term refinance changes the interest rate, repayment term or loan structure without providing substantial cash back to the borrower.

You might consider a rate-and-term refinance if you want to:

Seek a lower mortgage rate
Change the length of your repayment period
Adjust your monthly principal-and-interest payment
Move from an adjustable-rate to a fixed-rate mortgage
Change from one eligible mortgage program to another
Remove or add a borrower when permitted
Remove mortgage insurance

A lower rate does not automatically mean refinancing will save money overall. Closing costs, the new repayment period and how long you expect to keep the mortgage all affect the result.

Cash-Out Refinancing

As you make mortgage payments and your property value changes, you may build equity in your home. A cash-out refinance may allow you to borrow against a portion of that available equity.

Eligible homeowners may use the funds for purposes such as:

Home improvements or repairs
Consolidating qualifying debt
Education expenses
Major planned purchases
Other eligible financial needs

The amount available will depend on your property value, current mortgage balance, financial qualifications and applicable loan-to-value limits.

Cash-out refinancing increases the amount secured by your home and may change your rate, payment and repayment period. It should be evaluated in the context of your complete financial situation.

Refinancing to Consolidate Debt

Using a cash-out refinance to consolidate debt may allow you to replace several eligible balances with one monthly mortgage payment. Because mortgage rates may be lower than rates on certain credit cards or personal loans, this could reduce the interest rate applied to the consolidated debt.

However, there are important tradeoffs:

Your mortgage balance will increase
Closing costs may apply
Your repayment period may be longer
Paying debt over a longer period could increase total interest costs
Debt that was previously unsecured will become secured by your home

Debt consolidation does not eliminate debt, and it is not automatically the best choice for every homeowner. A Michigan First Mortgage Loan Officer can help you review the mortgage terms and estimated costs, but borrowers may also wish to consult a financial or tax professional about their broader financial strategy.

Refinance mortgage options

The mortgage available for your refinance will depend on your current loan, property, equity, financial qualifications and goals.

Fixed-Rate Mortgages

A fixed-rate mortgage maintains the same interest rate throughout the life of the loan, providing a predictable monthly principal-and-interest payment.

Explore Fixed-Rate Mortgages

Adjustable-Rate Mortgages

An adjustable-rate mortgage generally begins with a fixed introductory period. After that period, the rate may adjust according to the terms of the loan, which means the principal-and-interest payment may increase or decrease.

Explore Adjustable-Rate Mortgages

Conventional Refinancing

A conventional refinance may offer a variety of rate, term and cash-out options for borrowers who meet the applicable credit, income, equity and property requirements.

FHA Refinancing

Eligible homeowners with an existing FHA loan—or those who qualify to move into an FHA mortgage—may have refinancing options with requirements established by the Federal Housing Administration.

Explore FHA Loans

VA Refinancing

Eligible service members, veterans and surviving spouses may be able to refinance through a VA-backed mortgage program. Available options depend on eligibility, current financing and program requirements.

Explore VA Loans

Not every mortgage program is available for every refinance purpose

Your Mortgage Loan Officer can explain the options that apply to your current mortgage and goals.

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When does refinancing make sense?

Refinancing may be worth exploring when the potential financial or practical benefit outweighs the cost of replacing your mortgage.

Consider:

Your current interest rate and mortgage terms
The rate and terms available with a new loan
Estimated closing costs
Your new monthly payment
The total interest paid over the new loan term
How long you expect to keep the home or mortgage
The amount of equity you have available
Whether resetting the repayment term supports your long-term goals

One useful measurement is the break-even period: approximately how long it may take for anticipated monthly savings to recover your refinancing costs. This calculation is especially important if you expect to sell the home or refinance again within the next several years.

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What does it cost to refinance?

Because refinancing creates a new mortgage, many of the costs associated with purchasing a home may apply again. Depending on the loan and property, these may include:

Application or origination charges
Appraisal or property-valuation costs
Title services and title insurance
Credit-report charges
Recording fees
Prepaid interest
Initial escrow deposits
Other applicable third-party expenses

Some costs may be paid at closing or incorporated into the new mortgage when permitted. Financing closing costs reduces the amount needed upfront but increases the new mortgage balance and the interest paid over time.

You will receive disclosures outlining the estimated rate, payment and closing costs before completing the refinance.

Preparing to refinance

The specific documentation required will vary, but borrowers are commonly asked to provide:

Recent income documentation
Employment information
Federal income tax returns, when applicable
Bank or asset statements
Information about current debts
A recent mortgage statement
Homeowners insurance information
Identification
Additional property or financial documentation

If you are self-employed, own multiple properties or receive income from less traditional sources, additional documentation may be required.

What to expect during the refinance process

Discuss Your Goals

Begin with what you want to change about your current mortgage. Your Mortgage Loan Officer can help you identify potential refinance options.

Complete an Application

Provide information about your income, employment, assets, debts, current mortgage and property.

Review the Proposed Mortgage

Compare the new rate, term, estimated payment, closing costs and total borrowing costs with your current mortgage.

Complete the Property and Loan Review

Your refinance may require an appraisal or another form of property valuation. The application will also proceed through title review, underwriting and approval.

Review Your Final Terms and Close

Before closing, review your final loan terms, payment and costs. Once the refinance is completed, the new mortgage pays off the existing loan.

See what refinancing could do for you

The right refinance depends on more than a single interest rate. A Michigan First Mortgage Loan Officer can help you compare your current mortgage with available options and understand how the payment, term, equity and closing costs could change.

Frequently asked questions

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Can Michigan First help me refinance my mortgage?

Yes. Michigan First offers mortgage refinancing options that may help you change your interest rate, monthly payment or loan term, pay off your home sooner, or access available home equity. Whether refinancing is beneficial depends on your current mortgage, financial goals, closing costs, and the new loan terms for which you qualify.