Brian Scott, a senior loan consultant outside of Washington, D.C., put it this way, “The downside of refinancing would be the equity you give up to pay the closing costs and the potential term resetting.”
Scott elaborates that while it is typically advantageous to refinance, you want to make sure you can recoup your closing costs in at least a five-year window. Put another way, the purpose of refinancing is to save money, not to lose it.