ACCC Offers Tips on What You Need to Know Before You Refinance Your Home

As many homeowners still struggle to pay their mortgages, ACCC offers advice on how to effectively refinance.

July 13, 2015

How to refinance your home and save moneyGetting a new mortgage to replace the original is a great way to save money and lower your monthly payments, but not all lenders and borrowers are good candidates.  That’s why national nonprofit American Consumer Credit Counseling is offering helpful tips for homeowners to know before they restructure their mortgage.

Many homebuyers are misinformed about down payments, lender rules, mortgage rates and refinancing.  According to a recent survey from Zillow, 47 percent of current homeowners incorrectly believe they must wait at least one year between refinancing. Separately, the survey revealed that one in five homeowners – nearly 14 million Americans – said they did not believe underwater borrowers (owing more than your home is worth) could refinance. In addition, more than one-third of current homeowners incorrectly believed that you can only refinance your home every 12 months.

“Too many homeowners are unaware of the opportunities to refinance and save money,” said Steve Trumble, president and CEO of Newton-based American Consumer Credit Counseling.  “As people work through their careers and continue to increase their salary, they are more likely boost their credit score.  With this increase in credit comes the ability to procure home loans at lower rates.  A lower interest rate can have a significant effect on monthly mortgage payments, potentially saving homeowners hundreds of dollars a year.”

ACCC offers the following tips to know before refinancing a home loan:

  • Beware of Increased Terms: Borrowers should be aware that increasing the term of the loan repayment means more payments and more interest paid. Borrowers can use an online home refinance calculator to help calculate monthly payments under these repayment plans.
  • Meet Qualifying Criteria: Before deciding to refinance, borrowers should be sure to meet all of the qualifications. To refinance, homeowners should have regular income, at least 10 to 20 percent equity in their homes, and a FICO credit score of 740 or better. Borrowers with scores as low as 620 can qualify for a Federal Housing Administration mortgage, which are available through banks, credit unions, and other lenders.
  • Look at Short Term Loans: If you’re not going to stay in your home for over 10 years, you should consider a hybrid loan that is fixed for 5, 7, or 10 years and then converts into a 1-year adjustable rate mortgage. These loans reduce the amount of interest paid, but if you stay beyond the fixed period, your rate could rise.
  • Know Your Options: Before refinancing, weigh your options. Compare monthly payments, interest savings, length of mortgage, refinancing costs, eligibility etc. Before you refinance speak with your current lender and see what types of options are available and let the lender know you are shopping around for the best deal.

All homeowners have their own unique and personal financial situation, but taking advantage of refinancing can be rewarding – particularly when consumers take the time to properly research and make educated decisions on the timeliness of their repayments.

ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management and debt relief through education, credit counseling, and debt management solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loans, youth and money, homeownership, identity theft,  senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the Association of Independent Consumer Credit Counseling Agencies. For more information or to access free financial education resources, log on to or visit