How Much Equity Do I Need to Have Before Refinancing?

The equity you need to have built before refinancing depends at least partially on your current loan terms. Generally, your equity loan-to-value ratio will play a significant role in ensuring your ability to refinance, and will impact the potential savings you can get from refinancing.

In most cases, you should aim to have at least 20% equity before refinancing, since it will allow you to avoid paying for PMI for the new loan and make it easier to apply for refinancing. However, it is still possible to refinance with less than 20% equity, especially if you have a good credit score. Typically, the more equity you have, the easier and less costly it will be to refinance.

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You can reach out to potential lenders and mortgage brokers to get a sense of the equity requirements for various loan sizes and rates.