Refinancing Your Mortgage

Is refinancing right for you?

A refinance replaces your current mortgage with a new one. People refinance to lower their rate or monthly payment, shorten their term, switch from an adjustable to a fixed rate, remove mortgage insurance, or turn home equity into cash.

Types of refinance

• Rate-and-term: change your rate, your term, or both, without taking cash out.
• Cash-out: borrow more than you owe and take the difference in cash for renovations, debt payoff, or investing.
• Streamline: FHA Streamline and VA IRRRL refinances can require less paperwork for eligible FHA and VA loans.
• Investor refinance: DSCR cash-out or rate-and-term refinances qualify on the property's rental income, not your personal income.
• Removing mortgage insurance: refinancing an FHA loan to conventional once you have enough equity can remove monthly mortgage insurance.

When it usually makes sense

• Your savings cover the costs. Divide the closing costs by the monthly savings to find how many months it takes to break even. If you'll stay longer than that, it's worth a look.
• Rates or your credit have improved since you took out your current loan.
• You need cash for a big goal and a cash-out refinance costs less than other options like credit cards or personal loans.
• You want a predictable payment, moving from an adjustable rate to a fixed rate.

Things to consider

A refinance has closing costs, often a few percent of the loan amount. Starting a new 30-year term can lower your payment but increase the total interest you pay over time. A cash-out refinance replaces your whole first mortgage, so if your current rate is low, a HELOC may be a better way to tap equity. We'll run the numbers side by side so you can decide with confidence.