Should you refinance your home mortgage? Refinancing has its pros and cons—but, under the right circumstances, may pay off financially in the end. Here are some questions to ask yourself before taking the plunge.

Question 1: Why do you want to refinance?

Are you looking to lower your monthly mortgage payment, get a better rate, or change your adjustable-rate mortgage to a fixed-rate mortgage? Do you know the pros and cons of each type of mortgage? For example, adjustable-rate mortgages may initially have a lower cost, but you run the risk of increased rates over the life of the loan. A fixed-rate mortgage has a constant interest rate, but the only way to change that rate is to go through the refinancing process.

Do you want to take some equity out of your home for a renovation or another reason? If so, you may opt for a cash-out refinance, in which the borrower agrees to refinance for more than the amount owed on the house and takes out the difference in cash.

Refinancing can be a big decision, but your credit union can provide advice and help you find the best solution for your needs.

Question 2: Have your life circumstances changed?

Have there been significant changes for you and your family since you bought your house? Your answers could impact whether you decide to refinance or stick with your existing mortgage. For example, if your credit history is better than it was when you first purchased the house, you may be able to get a lower interest rate. Do you want to pay off your house before you retire? Paying off your mortgage sooner by changing your 30-year mortgage to a 15-year might be a smart strategy, depending on your circumstances. (Choosing a shorter term may lower your interest rate, too. Call 850.505.3200 for details.)

Question 3: Can you afford to spend the time and money on a refinance?

Bear in mind that refinancing comes at a cost. You’re restarting your mortgage clock—and essentially closing on your house all over again—so the process will take some time. Your application may mean a new credit inquiry and could impact your credit score (although the impact may be minimal)—and you may have to pay thousands of dollars in closing costs and fees. This initial cost may pay for itself eventually, however, if your interest rate, monthly mortgage payment, or terms change in your favor.

Question 4: How should I get started?

As a first step, you may find Pen Air’s “Should I Refinance?” calculator helpful to estimate future monthly payments on your mortgage. Your local credit union can also provide advice about your options and answer any questions you might have.