Process
Refinance
Replacing your existing mortgage with a new one — to lower the rate, change the term, or pull out cash — which restarts the loan and carries its own closing costs.
What does refinance mean?
Refinancing swaps your current mortgage for a new loan, usually to cut the rate, shorten the term, or tap equity.
It isn't free even at a lower rate: a new loan restarts the amortization schedule at its most interest-heavy point and carries $3,500–$6,000 in Michigan closing costs. The decision comes down to break-even — how many months of savings it takes to recoup those costs.
How break-even works
Say refinancing costs $4,500 and lowers your payment by $150 a month. Divide $4,500 by $150 and your break-even is 30 months — two and a half years to recoup the cost.
Stay in the home past that point and the refinance saves money; sell or refinance again sooner and you've paid to lose ground.
Common questions
When is refinancing worth it?
When you'll keep the loan longer than it takes the monthly savings to repay the closing costs — the break-even. If $4,500 in costs saves $150 a month, you break even at 30 months; stay past that and you profit.
How much does refinancing cost in Michigan?
Usually $3,500–$6,000, driven by title reissue rates and whether the county requires a new survey. Ask your title company for the reissue credit on title insurance to cut those costs, a discount many owners miss.
Does refinancing restart my loan?
Yes — a new loan resets the amortization schedule at its most interest-heavy point, so you begin paying mostly interest again. That's why a lower rate alone doesn't always justify refinancing, especially late in a loan.