#AskBP 076: When Is It Smart to Refinance a Property and How Does It Affect My Credit Score?

by | BiggerPockets.com

Rates are predicted to be going up, so taking advantage of today’s low rates can only help your bottom line. On this episode of the #AskBP Podcast, Mindy Jensen talks about refinancing your mortgage, and how it can affect your credit score.

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About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like… seriously… a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of “The Book on Investing in Real Estate with No (and Low) Money Down“, and “The Book on Rental Property Investing” which you should probably read if you want to do more deals.


  1. Kyle Hipp

    I might be missing something but I don’t believe that a cash out mortgage should affect your credit utilization rate as it is not revolving debt. If my original note was for $80,000 on a $100,000 property, then 5 years later I refinance with cash out at $100,000 but the property is now worth $150,000 because of value added improvements and/or appreciation, my loan to value is actually lower even though I did a cashout. However even in that case I don’t know that the specifics of loan to value are reported either. Any clarifications on that if I missed something?

    • Mindy Jensen

      Thanks Kyle.
      I just re-watched and I mis-spoke in the video. A cash-out mortgage will affect your debt-to-income ratio rather than your credit utilization. Thanks for the catch. I don’t believe the loan to value shows up on the credit report, but the new mortgage amount does.

  2. Alma Mills

    I understand that your monthly payment may go down if you refinance but it may be unwise to do so, especially if you have been paying down the note for many years. Each time you do a regular 30 year refinance you will be pushing back the final payoff date and as your payment is heavy on interest in the early years refinancing an older mortgage will cost you money over the long run.

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