Refinance
Rate & Term Refinance
Replace your existing loan with better terms, a different rate, a different length, or without the mortgage insurance you are currently paying.
How a rate & term refinance works
A rate-and-term refinance replaces your current mortgage with a new one. You are not taking cash out; you are changing the shape of the debt. That might mean a lower rate, a shorter or longer term, moving off an adjustable rate, or getting out from under mortgage insurance you no longer need.
The decision comes down to break-even. A refinance has closing costs, and those costs buy you a monthly saving. Divide one by the other and you get the number of months before you come out ahead. If you plan to stay in the home well past that point, refinancing makes sense. If you might move before it, it usually does not, and we will tell you so rather than write the loan anyway.
The mortgage insurance angle is the one people miss most often. If you bought with an FHA loan and have since built equity, refinancing into conventional financing can remove a premium that would otherwise stay for the life of the loan. For some borrowers that saving outweighs anything the rate is doing.
FAQ
Rate & Term Refinance questions
What is my break-even point?
The closing costs divided by your monthly saving, expressed in months. If refinancing costs you a certain amount and saves you a certain amount monthly, that ratio tells you how long you need to stay to profit from it. We calculate it with your real numbers, not an example.
Can I refinance to a shorter term?
Yes, and it is often the most financially significant move available. A shorter term raises the monthly payment but reduces total interest considerably. Whether it fits depends on your cash flow.
Do I need a new appraisal?
Usually, though some refinances qualify for an appraisal waiver depending on the loan and the property. We will know early in the process.
Will I skip a mortgage payment?
It can appear that way because of how interest is paid in arrears and how the new loan is funded, but you are not getting a free month, the amount is accounted for at closing. It is worth understanding rather than being surprised by.
Run your actual numbers.
Break-even, closing costs, what it saves. Fifteen minutes, no credit pull.