What is a refinance?

A refinance pays off your existing home loan and replaces it with a new mortgage. That new loan can change your interest rate, loan term, and even your monthly payment — depending on the options you choose.

• ✓Lower rate: potentially reduce your monthly payment and long-term interest
• ✓Shorter term: build equity faster (e.g., 30 → 15 years)
• ✓Stability: switch from an ARM to a fixed rate
• ✓Cash-out: access equity for goals like renovations or debt consolidation

Common refinance types

• Rate & Term Refinance: change your rate and/or term without taking cash out.
• Cash-Out Refinance: refinance for more than you owe and receive the difference (equity) as cash.
• Streamline (FHA/VA): simplified refinance options for eligible FHA or VA borrowers.

How refinancing works

1. 1) Quick review: your current loan, goals, and timeline
2. 2) Compare options: rates, payments, terms, and costs
3. 3) Lock & verify: collect docs and confirm numbers
4. 4) Close: sign documents and replace the old mortgage

Costs & break-even

Refinances typically include closing costs. A simple way to evaluate a refinance is the break-even point:

• Break-even = Closing Costs ÷ Monthly Savings
• If you plan to keep the home past the break-even point, the refinance may make sense.

Some options may allow costs to be rolled into the loan (depending on program and equity), which changes the math.

Is refinancing right for you?

• You want a lower rate or a more predictable payment
• You plan to stay in the home long enough to benefit
• You want to shorten the term and build equity faster
• You want to access equity for a specific goal

Every scenario is different — the best first step is a quick review of your current loan and goals.