Where to cut?

Hi, this is my first time posting here. I’ve had this FLF for about 1-2 years now and it’s lived in the corner of my dining room ever since it came home. There’s not a lot of direct light there.

It looks sad and I feel bad! I would like to cut it and repot it and give it a fresh start. There are new leaves coming in at the very top, and two smaller branches at the bottom.

Can I cut it where I marked it in yellow? Should I leave the new bottom branches alone? Should I just put the top portion in water once I cut it?

Any advice would be appreciated. Thank you!