RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

Should You Refinance Your Mortgage to Build Equity Faster?

Home CRISIS-Friendly
April 9, 2021
Reading Time: 2 mins read

Home equity is the difference between your house’s current market value and the amount you still owe on your mortgage. Speeding up the rate at which you pay down your loan balance can help you build equity faster. 

How Can Refinancing Help You Build Home Equity?
If you refinance your mortgage and switch to a shorter term, your monthly payments may increase substantially, but you will chip away at the principal faster. Refinancing to a mortgage with a shorter term may also help you qualify for a lower interest rate. Because of that, plus the fact that you will be paying interest for fewer years, you will pay less in interest overall with a shorter loan term.

Is Refinancing to Build Home Equity a Good Idea for You?
If you refinance your mortgage, you will have to pay thousands of dollars in closing costs. It may take several years for you to reach a breakeven point when the amount you saved in interest by refinancing equals the amount you paid in closing costs. If you move before then, you won’t save money by refinancing. 

A higher monthly payment can allow you to pay off your mortgage faster, but you should think carefully about whether you can afford it now and will be able to afford it in the future. If you take on a higher mortgage payment that you can’t cover, you may wind up with a lower credit score and may even lose your home in foreclosure. If your or your spouse’s job security is in question, you may regret taking on a higher mortgage payment. 

If you haven’t contributed as much as you would like to retirement accounts or college savings accounts for your kids, increasing your monthly mortgage payment may not be a smart financial move. Doing so may not leave you with enough room in your budget to put money toward those other important long-term goals. 

What are Other Ways to Build Equity Quickly?
There are several ways to pay down your mortgage balance and build equity faster without refinancing. For example, you can pay more each month, make 13 payments per year instead of 12 or pay a lump sum when you receive a gift, bonus or income tax refund. Check your loan terms so you don’t get charged a prepayment penalty.

If you take one of these approaches, you won’t have to pay closing costs like you would for a refinance. Another benefit is that you will have flexibility. If money is tight one month because of an unanticipated expense, if you or your spouse experiences a job loss or pay cut or if you decide to focus on another priority, such as saving to put a down payment on a new car, you will be able to simply make your regular required mortgage payment.

ShareTweetShare
Paige Brown

Paige Brown

As Managing Editor, Social Media & Blog, Paige oversees RISMedia’s social media editorial and creative strategy, as well as managing content for the Housecall Blog, ACESocial and other editorial projects. She also helps develop marketing materials, email campaigns and articles for Real Estate magazine. Paige graduated from Central Connecticut State University with a B.A. in Journalism and Public Relations.

Related Posts

How to Maximize Storage Space and Organize Your Garage
CRISIS-Friendly

How to Maximize Storage Space and Organize Your Garage

June 30, 2025
How to Maximize Storage Space and Organize Your Garage
CRISIS-Friendly

How to Maximize Storage Space and Organize Your Garage

June 30, 2025
Decorating to Sell vs. Decorating to Stay
CRISIS-Friendly

Decorating to Sell vs. Decorating to Stay

June 19, 2025
Home Features That Sound Nice But Aren’t Always Worth the Investment
CRISIS-Friendly

Home Features That Sound Nice But Aren’t Always Worth the Investment

June 18, 2025
How to Create a Seasonal Command Center for a Stress-Free Summer
CRISIS-Friendly

How to Create a Seasonal Command Center for a Stress-Free Summer

June 18, 2025
Seasonal Edits to Help You Declutter Before Summer
CRISIS-Friendly

Seasonal Edits to Help You Declutter Before Summer

June 18, 2025
Please login to join discussion
Tip of the Day

Growth, Strategy and Excellence: Transform Your Brokerage at RISMedia’s CEO Exchange

Join top brokers Sept. 3–5 in Washington, D.C. to exchange cutting-edge strategies, gain market insights, foster elite networking—and propel your brokerage toward profitable growth and lasting success. Register now.

Business Tip of the Day provided by

Recent Posts

  • eXp Realty Names Lofty Preferred Solution Provider in New CRM of Choice Program
  • NWMLS Accuses Compass of Demanding ‘Free Riding’ in Lawsuit Response
  • More Face Time: 3 Ways to Boost Engagement With Selfie-Style Content

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2025 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2025 Newsmakers
    • 2024 Newsmakers
    • 2023 Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2025 Power Broker
    • 2024 Power Broker
    • 2023 Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2025 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

X