A lot of homeowners go into a mortgage loan expecting to refinance it a few years down the road. This is especially true of homeowners who took on an adjustable rate mortgage. Others consider refinancing to take advantage of lower interest rates or to extend their mortgage repayment term. Refinancing isn’t always a good idea. Sometimes it’s better to just leave your mortgage alone.

When you’re close to paying off your mortgage loan. If you’re more than halfway done paying off your mortgage, now probably isn’t a good time to refinance. You’ll end up paying a lot more interest on your home and lose the equity you’ve gained. The same thing goes if you’ve been making prepayments toward your mortgage to pay it off sooner.

Your interest rate only goes down a little. Lowering your interest by only a percent or half-percent isn’t worth it in the long run. Refinancing has additional costs and you won’t break even let alone get any savings if you refinance for a slightly lower interest rate. Use an online refinance calculator to figure out whether refinancing would actually save you any money.

You want to pay off non-mortgage debt. Though it was once widely recommended, refinancing your mortgage to pay off your credit card debt is a bad idea. Credit card debt is unsecured debt, meaning an asset does not back it, and it’s easier to have discharged in a bankruptcy. If you try to bankrupt your refinanced mortgage loan, you’ll end up losing your home.

Your credit isn’t better than when you first got your mortgage. If your credit hasn’t improved, or it’s gotten worse since you first bought your home, refinancing isn’t a good idea, right now. You probably won’t qualify for a better mortgage rate. Shopping for loans right now could hurt your credit score more. Work on improving your credit before you try to refinance.

You don’t have enough money for closing costs. When you refinance a mortgage loan, you’ll pay many of the same closing costs as when you first bought your home. If you can’t afford your closing costs, your lender may be able to offer you no-closing cost loan which simply charges you a higher interest rate instead of upfront closing costs. The increased interest rate could negate the savings you’re expecting to see from refinancing.

You plan on moving soon. If you’re not going to live in your home much longer, you may not have enough time to reap the savings from refinancing before you move again. Remember that refinancing involves closing costs, just like a new home purchase does. So, if you move in the next few years and plan to buy your next phone, you’ll have to play closing costs twice.

Refinancing your mortgage isn’t always a good idea. Even if you’ll have lower payments in the short run, you may end up paying more interest over the life of the loan than if you hadn’t refinanced at all. Take your refinance decision into careful consideration and use internet and book resources to help you make the right choice.