If you bought a home within the last five to seven years and you’ve built up equity, you might be thinking about refinancing. A refinance can lower your payments and save you money on interest, but it’s not always the right move. To know if it’s right for your financial goals, you may want to talk to a financial advisor. If you decide to move forward, you’ll want to avoid these five common refinancing mistakes that could cost you money.

1. Choosing a No Closing Costs Mortgage

A “no-closing-cost mortgage” is a mortgage that doesn’t require you to pay closing costs upfront, in cash, on closing day. But the name is a bit of a misnomer — those closing costs don’t magically disappear. Instead, you’ll pay them a little bit at a time throughout your loan term.

Saving up for a down payment and closing costs is a huge obstacle to homeownership for many people, so no-closing-cost mortgages have an obvious upside. But you’ll usually also pay more interest in the long-run.

2. Lengthening the Loan Term

Extending your home refinance loan’s term gives you more time to pay off the debt and may lower your monthly payment. But it will also likely lead to paying more interest overall. If one of your refinancing goals is to lower your payments, stretching out the loan term can lighten your financial burden each month.

The only problem is that you’re going to end up paying substantially more in interest over the life of the loan. You generally can’t extend your loan’s term whenever you want or on your own. You’ll need to qualify for a new home refinance loan if you’re trying , and lenders have qualification requirements for their hardship assistance programs.

3. Refinancing With Less Than 20% Equity

If mortgage rates come down further toward 6 percent, some homeowners might save money from refinancing. You can prepare for a potential refinance by determining how much value you’ll need in your house to refinance your mortgage.

Lenders often want applicants to have at least 20 percent equity before they consider refinancing a loan. In general, lenders are more comfortable working with applicants who have more equity or more of a personal stake in the home.

4. Refinancing With Your Current Lender Without Shopping Around

One of the biggest questions for someone who wants to refinance their mortgage is who to refinance with. If you’re thinking of refinancing to tap into home equity or change your loan terms, here are the ups and downs of going with your current lender versus one of their competitors.

You can usually refinance with the same bank or lender that you originally got a loan through. But keep in mind, your mortgage lender is the institution that originated your loan, and that may be different from your current servicer.

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