Filip Telibasa, CFP and owner of Benzina Wealth, says many homeowners are surprised by refinance-related costs such as prepaid taxes and insurance, escrow funding requirements, transfer taxes in certain states, and the reality that “no closing cost” refinances still include costs somewhere in the loan structure. He recommends requesting a full Loan Estimate early in the process and comparing the total cash to close rather than focusing only on the monthly payment. 

Telibasa notes that homeowners should evaluate refinancing beyond simply securing a lower interest rate. He says the true breakeven point depends on how long you plan to stay in the home, whether the lower payment meaningfully improves cash flow, and what you plan to do with the savings each month. For some homeowners, investing the difference may create more long-term value than increasing discretionary spending.