Home Refinance

Refinancing your mortgage can create retirement liquidity in two main ways:

• Rate-and-term refinance: Replacing your existing loan with one at a lower interest rate and/or shorter term, which can reduce your monthly payment and free up cash flow.

• Cash-out refinance: Borrowing more than you currently owe, taking the difference in a lump sum from your home equity.

For retirees, qualifying can be harder because lenders focus on debt-to-income ratios based on fixed income sources (Social Security, pensions, investment income) rather than wages. Cash-out refinancing can help consolidate higher-interest debt or fund major expenses, but it also raises your mortgage balance, may extend your payoff timeline, and means carrying mortgage debt longer into retirement. Closing costs usually run around 2–5% of the new loan, so you need several years of lower payments to “break even” on a simple rate-and-term refinance. If your home is nearly paid off, taking on a new 15–30 year mortgage should be weighed carefully against your long-term goals, risk tolerance, and estate plan.

Learn more from Cambridge Credit

• Cash-Out Refinancing – Overview of how cash-out refinances work, when they make sense, and key cautions. Cambridge Credit Counseling

• Mortgage Basics – Explains core mortgage concepts, including rates, terms, and how changes affect your payment. Cambridge Credit Counseling

• Mortgage Shopping Tips – Guidance on qualifying, comparing offers, and understanding credit checks when refinancing. Cambridge Credit Counseling

• Frequently Asked Questions – Includes Q&A on whether refinancing is a good option and how your credit affects the terms you’re offered.