Same Home.
A Better Loan.
A rate and term refinance replaces your mortgage with one that fits better — a lower rate, a lower payment, a shorter payoff, or no more mortgage insurance. No cash out, just a better structure.
What Is a Rate & Term Refinance?
It’s a new loan that pays off your current one, with the balance staying roughly the same. What changes is the structure: the interest rate, the length of the loan, or both. Because you’re not pulling cash out, the qualifying is simpler and Texas’s cash-out rules don’t apply.
The common jobs it does: lowering the monthly payment when rates drop, shortening the term to pay the home off faster, removing FHA mortgage insurance by moving into a conventional loan once you have the equity, or removing a person from the loan after a life change.
When It Makes Sense
Rates Have Dropped
If today’s rates are meaningfully below yours, the math may already work. The break-even — savings versus cost — is the number that decides it.
Out of FHA, Into Conventional
FHA mortgage insurance usually stays for the life of the loan. With enough equity, refinancing into a conventional loan removes it entirely.
Pay It Off Sooner
A shorter term carries a higher payment but dramatically less total interest. If your income has grown since you bought, this is worth running.
Restructure After Life Changes
Divorce, inheritance, a co-signer who’s served their purpose — a refinance is how a loan gets rewritten to match your life now.
Common Misconceptions
Refinancing always restarts the clock at 30 years.
Only if you pick a new 30-year term. You can refinance into a 25, 20, or 15 — or structure the new loan around your original payoff date.
You need perfect credit to refinance.
Refinance guidelines mirror purchase guidelines — conventional from around 620, FHA options below that. If you qualified once, there’s a good chance you can again.
It only makes sense if the rate drops a full point.
The old one-percent rule ignores your balance and your timeline. On a larger loan, a smaller improvement can clear break-even quickly. The math, not the rule of thumb, decides.
Rate & Term Questions, Answered
Often yes, though some conventional refinances receive appraisal waivers automatically. If you have an FHA or VA loan, the streamline programs usually skip the appraisal entirely.
Usually, yes — most borrowers finance the costs rather than paying cash. It slightly raises the balance, and we'll show you both versions so you can compare.
Typically two to four weeks. With a complete file and fast responses it can move quicker.
On a conventional loan you can request PMI removal at 20% equity without refinancing. Refinancing to drop mortgage insurance mainly matters for FHA loans, where the insurance usually stays for the life of the loan.
This page is general educational information and is not a commitment to lend, an offer of credit, or legal, tax, or financial advice. Whether refinancing makes sense depends on your rate, loan balance, closing costs, and how long you plan to keep the loan. All loans subject to credit approval, underwriting, and property qualification. Equal Housing Opportunity.
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