As we kick off 2026, many homeowners are looking to refinance as a way to lower monthly payments, switch loan types, or tap into home equity. After a period of higher rates in recent years, the market has seen meaningful improvement, with average 30-year fixed mortgage rates hovering around 6% (recent reports show figures like 5.99% for purchases and slightly higher for refinances, such as 6.5%). 

If you’ve been paying a rate above 6.50 – 7.75% from earlier years, now could be a smart time to explore refinancing. Here’s a practical guide to help you decide if refinancing makes sense in 2026, along with key steps to get approved and maximize savings. 

Why Consider Refinancing in 2026? 

Mortgage rates have trended downward following Federal Reserve actions in late 2025, creating the perfect opportunity for many borrowers to lower their current interest rate or monthly payment. 

Refinancing can deliver real benefits if: 

  • Your current rate is 0.5–1% higher than today’s offers (the typical breakeven threshold to offset closing costs). 
  • You plan to stay in your home long enough to recoup fees (often 2–4 years but sometimes even less). 
  • You want to shorten your loan term, switch from an adjustable-rate mortgage (ARM) to a fixed rate, or do a cash-out refinance for home improvements, debt consolidation, or other needs. 

For example, dropping from 7% to around 6% on a $300,000 loan could save hundreds per month and tens of thousands in interest over the lifetime of your loan. 

Is Refinancing Right for You Right Now? 

If you’re wondering if a refinance is right for you, here are some pros and cons to consider: 

Pros: 

  • Lower monthly payments and total interest. 
  • Access equity without selling. 
  • Potential to eliminate private mortgage insurance (PMI) if you’ve built enough equity. 
  • Lock in predictability before any potential rate volatility. 

Cons: 

  • Closing costs (typically 2% of the loan amount) can add up, though no-closing-cost options exist. 
  • Refi rates are often slightly higher than purchase rates. 

Rule of thumb: Run the numbers. Use a refinance calculator to estimate your breakeven point (how long until savings cover costs). If you’ll stay put for at least that long, it’s often worth pursuing. 

Steps to Get Approved for a Refinance (or Purchase) in 2026 

Whether refinancing or buying, strong preparation boosts approval odds and gets you the best terms. Lenders scrutinize these key areas: 

  1. Check and Boost Your Credit Score – Aim for 620+ (higher for best rates; 740+ unlocks the lowest). Pay down debts, correct errors on your report, and avoid new credit inquiries. If you’re not sure the best route to up your credit, please reach out to me and we can take a look and help you make a plan! 
  1. Get Your Documents Ready  – All lenders will need to verify income,  assets, and ID so having these documents ready and available will make getting approved that much easier and quicker. Common documents needed: Pay stubs (last 30 days), W-2s/tax returns (2 years), bank statements (2 months), ID, and current mortgage statement (for refis). 
  1. Get Pre-Approved Early – This shows sellers (or gives you confidence) and locks in a rate option in some cases. 

Final Thoughts: Don’t Wait for the “Bottom” 

2026 looks promising for mortgage borrowers, with rates in a more affordable range than the past couple of years. If your current setup feels burdensome, acting sooner rather than later can lock in savings before any unexpected shifts. 

I’m here to help make this process straightforward and personalized. Whether you’re refinancing to save money, switching terms, or exploring options for a new home, please reach and we’ll crunch the numbers together and see if 2026 is your year to optimize your mortgage. 

Call me today at (214) 542-4095 or email Rob@TeamRobHomeLoans.com for a free consultation. Your lower payment could be just a conversation away! 

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