That's completely normal. Remember that your credit score is just a crude way of evaluating your credit worthiness for your next loan. Presumably you aren't applying for a new loan right after refinancing.
Refinancing does a number of things that all will lower your score, at least temporarily:
- one or more "hard" credit checks on your file
- opening a new loan and increasing your total debt
- paying off and closing an old loan, because it may decrease the average length of your credit history, and it also decreases your apparent borrowing power.
The hard credit checks will drop off your report in 2 years. As you make payments on the new loan, it will get older (longer credit history= good), your total debt will go down (good) and your total debt as a percentage of your borrowing ability will go down (good).
(Somewhat bizarrely, having a $100,00 mortgage balance on a loan that started out at $150,000 a few years ago, is better for your score than paying off that loan and replacing it with a brand new $100,000 loan.)
