Refinance When Home Values Are Falling

Lower valuations push up LTV. Consider paying down balance, improving credit, or waiting for equity to recover if pricing is unfavorable.

Equity and property value are equally important. A higher loan‑to‑value (LTV) often increases rates or adds mortgage insurance. If your appraisal could be borderline, gather comps, list improvements you’ve made, and be ready to confirm property details during the appraiser’s visit.

Your credit profile influences pricing more than most people realize. Paying down revolving balances to reduce utilization, disputing clear errors on your report, and avoiding new hard inquiries in the weeks before you apply can meaningfully improve the offer you receive.

Finally, shop more than one lender. Request official Loan Estimates on the same day so you’re comparing like‑for‑like. Ask about lender credits, pricing for different rate/point combinations, and whether a no‑closing‑cost option makes sense for your hold period.

Rates matter, but so do fees and the time you plan to keep the loan. A slightly lower rate may not help if closing costs are high and you expect to sell soon. The most reliable way to compare real cost is to look at the APR, review the Loan Estimate line items, and calculate your break‑even point.

Documentation is straightforward but must be complete: recent pay stubs, W‑2s or 1099s, two months of bank statements, and government ID. Self‑employed borrowers typically provide two years of personal and business tax returns. Respond quickly to underwriting conditions to keep your timeline on track.

Related Articles

• How Appraisals Impact Your Refi
• Should I Refinance Now?
• Cash‑Out Refinance for Home Improvements
• How Much Equity Do I Need to Refinance?

Educational only. We are not a lender.