Mortgage Refinance Options
Refinancing replaces an existing mortgage with a new loan. The right structure may change your rate or term, provide eligible equity proceeds, remove certain mortgage insurance, or match the financing more closely to how you use and document the property.
- Rate-and-term and cash-out refinance options
- Conventional, FHA, bank statement, jumbo, and DSCR paths
- Primary homes, eligible second homes, and investment properties
- Side-by-side review of payment, APR, costs, and break-even
Review My Refinance Options
Share your estimated value, current balance, payment, loan type, and goal. The initial conversation has no obligation, and no credit pull is required to get started.
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Start With the Purpose of the Refinance
A lower rate can be useful, but it is not the only reason to refinance—and a lower payment alone does not prove that a refinance saves money. Extending the repayment period can reduce the monthly obligation while increasing the time in debt and the total interest paid. Define the goal first, then measure whether the new loan improves it after costs.
Change rate or term
Replace the current loan to adjust the interest structure, monthly principal-and-interest payment, or repayment period.
Access home equity
Use eligible equity for improvements, reserves, investment, education, or debt restructuring through a cash-out refinance.
Review mortgage insurance
Compare whether a conventional refinance could remove FHA insurance or avoid new PMI at the available equity level.
Restructure property debt
Consolidate eligible liens, move from an adjustable structure, or select financing that better fits the property's occupancy and income.
Rate-and-Term Refinance
A rate-and-term refinance primarily changes the interest rate, loan term, or type of mortgage without providing substantial cash proceeds. Common goals include changing from an adjustable-rate to a fixed-rate mortgage, shortening or extending the term, or replacing one mortgage program with another.
Compare the new payment and APR with lender fees, title charges, appraisal costs, prepaid items, and the remaining term of the existing loan. Dividing eligible closing costs by the estimated monthly savings can provide a simple break-even estimate, but total interest and the expected time in the property also matter.
Cash-Out Refinance
A cash-out refinance replaces the current mortgage with a larger loan and pays eligible equity proceeds after existing liens and closing costs. Available proceeds depend on the appraised value, current balances, occupancy, credit, qualification method, program limits, and lender guidelines.
Moving other debt into a mortgage may lower the combined monthly payment, but it can convert unsecured debt into debt secured by the property and may extend repayment. Compare the new mortgage's total cost and risk with alternatives before proceeding.
If the property needs eligible rehabilitation, an FHA 203(k) refinance may combine the mortgage and approved improvement costs.
Refinance Programs We Can Compare
| Option | May fit | Important review |
|---|---|---|
| Conventional | Documented residential borrowers | Equity, credit, income, PMI, and complete cost |
| FHA streamline | Eligible borrowers with an existing FHA mortgage | Net tangible benefit, seasoning, payment history, and program rules |
| Bank statement | Eligible self-employed borrowers | Deposit history, business expenses, equity, and reserves |
| DSCR | Eligible rental-property investors | Property cash flow, value, reserves, and prepayment terms |
| Jumbo | Higher-value residential properties | Loan size, liquidity, reserves, documentation, and lender overlays |
Explore conventional loans, FHA streamline refinancing, bank statement loans, or DSCR investment-property loans.
Refinance vs. HELOC or Home Equity Loan
A cash-out refinance changes the entire first mortgage. A HELOC or home equity loan adds separate financing and may preserve the current first-mortgage rate. This can be important when the existing mortgage has favorable terms, but second-lien products have their own rates, payments, fees, draw rules, adjustment features, and qualification requirements.
Compare the combined payment and total cost, not just the amount of cash received. Review our HELOC and home equity options before replacing an attractive first mortgage.
What to Compare Before Refinancing
- Current balance, rate, payment, remaining term, and any prepayment provision
- New interest rate, APR, term, payment, and maximum ARM payment if applicable
- Lender, appraisal, title, settlement, recording, and prepaid costs
- Estimated break-even period and expected time in the property
- Cash received, new loan balance, and total debt after closing
- Mortgage insurance, escrow changes, taxes, insurance, and reserves
How the Refinance Process Works
Set the goal. Identify the payment, term, equity, or loan-structure result you want to improve.
Review the current mortgage. Gather the latest statement, note terms if available, property information, and estimated value.
Compare eligible options. Review rate, APR, payment, costs, equity, documentation, and alternatives side by side.
Complete appraisal and underwriting. The lender verifies the borrower, property, title, insurance, and program requirements.
Review and close. Examine the final disclosures and confirm that the approved loan still meets the original goal.
Mortgage Refinance FAQs
When does refinancing a mortgage make sense?
Refinancing may be worth reviewing when it can improve the complete financial result, such as changing the rate or loan term, replacing an adjustable loan, removing eligible mortgage insurance, accessing equity, or restructuring debt. Compare the new payment, APR, closing costs, break-even period, remaining balance, and total interest rather than looking only at the advertised rate.
What is a rate-and-term refinance?
A rate-and-term refinance replaces the existing mortgage primarily to change the interest rate, repayment term, or loan structure, generally without taking substantial cash out. The new loan pays off the current mortgage, and the borrower begins payments under the new terms after closing.
What is a cash-out refinance?
A cash-out refinance replaces the current mortgage with a larger loan and provides eligible equity proceeds after existing liens and closing costs are paid. Available cash depends on the property value, existing balances, occupancy, loan program, credit, income or alternative qualification method, and lender limits.
Can refinancing remove mortgage insurance?
Potentially. A conventional refinance may remove FHA mortgage insurance or avoid new conventional PMI when the property value and new loan amount produce sufficient equity. A new appraisal, credit, income, costs, and the expected time in the loan should be evaluated before deciding.
How much does a mortgage refinance cost?
Costs may include lender charges, appraisal, title and settlement services, recording, prepaid interest, escrow funding, and applicable taxes or government fees. Some structures reduce upfront cash by using lender credits or adding eligible costs to the loan, but that can affect the rate, balance, payment, or total cost.
Is a HELOC better than a cash-out refinance?
It depends on the goal. A HELOC or home equity loan may preserve an attractive existing first-mortgage rate, while a cash-out refinance combines the debt into one new first mortgage. Compare both rates, payments, closing costs, draw rules, adjustment risk, and repayment terms.
Ask Abe About Your Refinance
Every borrower and property is different. Send me your question and a few details about what you are trying to accomplish. I'll help you understand the options that may fit before you take the next step.
Educational information only. This is not a commitment to lend, guarantee of approval, or quote. Refinancing can increase the loan balance, extend repayment, and increase total interest or other costs. Programs, rates, terms, costs, equity requirements, and underwriting vary by lender and may change.
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