Mortgage Refinance
Lower your rate. Access your equity. Optimize your investment strategy with a mortgage refinance.
Why Consider a Mortgage Refinance?
A strategic mortgage refinance can save thousands over the life of your loan or unlock capital for new investments.
Lower Your Interest Rate
A mortgage refinance can reduce your rate by 0.75% or more, significantly cutting monthly payments and total interest costs over the loan term.
Access Home Equity
Cash-out mortgage refinance options let you tap accumulated equity for renovations, investments, debt consolidation, or other financial goals.
Remove PMI/MIP
Once you've built 20% equity, a mortgage refinance can eliminate private mortgage insurance and save $100-300+ monthly.
Shorten Your Term
Refinance from a 30-year to a 15 or 20-year loan to pay off your mortgage faster and save substantially on interest.
Switch to Fixed Rate
Convert an adjustable-rate mortgage (ARM) to a fixed rate through mortgage refinance for payment stability and protection against rising rates.
Consolidate Debt
Roll high-interest debt into your mortgage refinance at a lower rate, simplifying payments and potentially saving thousands.
Types of Mortgage Refinance Options
Choose the mortgage refinance option that aligns with your financial goals.
Rate-and-Term Refinance
Most Popular Mortgage Refinance
Replace your current mortgage with a new loan at a lower rate, different term, or both—without taking cash out.
- Lower your interest rate
- Change loan term (30 to 15 years)
- Switch from ARM to fixed rate
- Remove PMI once at 20% equity
- Typically requires 5-10% equity
Cash-Out Mortgage Refinance
Access Your Home Equity
Replace your mortgage with a larger loan and receive the difference in cash. Use funds for renovations, investments, or debt payoff.
- Access equity as cash at closing
- Fund home improvements
- Consolidate high-interest debt
- Invest in additional properties
- Requires 20%+ equity remaining
Streamline Refinance
FHA, VA & USDA Mortgage Refinance
Simplified mortgage refinance for existing government-backed loans with reduced documentation and faster processing.
- Less paperwork required
- Often no appraisal needed
- Faster closing timeline
- Lower closing costs
- Must have existing FHA/VA/USDA loan
No-Closing-Cost Refinance
Reduce Upfront Costs
Lender covers closing costs in exchange for a slightly higher interest rate—ideal if you may not stay long-term.
- Zero out-of-pocket at closing
- Slightly higher interest rate
- Good for shorter hold periods
- Preserves cash for other uses
- Compare total cost over time
📊 Mortgage Refinance Break-Even Calculator
The break-even point is when your monthly savings equal your closing costs. After this point, every month is pure savings from your mortgage refinance.
Rule of thumb: A mortgage refinance typically makes sense if you can reduce your rate by 0.75% or more AND you'll stay in the home past your break-even point. According to Consumer Financial Protection Bureau (CFPB) guidance, calculating your break-even point is essential before proceeding.
Mortgage Refinance Example:
Closing costs: $6,000
Monthly savings: $250
Break-even: $6,000 ÷ $250 = 24 months
If you'll stay longer than 24 months, the mortgage refinance makes financial sense. After 24 months, you save $250/month = $3,000/year.
Mortgage Refinance Requirements
Requirements vary by loan type. Here's what to expect for your mortgage refinance.
Conventional mortgage refinance requires 620+. FHA allows 580+. VA has no minimum (most lenders want 620+).
Rate-and-term: 5-10%. Cash-out mortgage refinance: 20%+ must remain after taking cash.
Standard max DTI for mortgage refinance. Some programs allow up to 50% with compensating factors.
Of loan amount. Includes appraisal, title, lender fees. Can be financed or paid upfront.
When Does a Mortgage Refinance Make Sense?
Not every rate drop justifies a mortgage refinance. Consider these factors before deciding.
✅ A Mortgage Refinance Often Makes Sense When:
When a Mortgage Refinance May NOT Make Sense
• You're moving or selling within 2-3 years
• Closing costs exceed long-term savings
• You'd extend your term significantly and pay more total interest
• You're close to paying off your current mortgage
• Your credit has dropped significantly since your original loan
Mortgage Refinance Requirements by Loan Type
Each loan program has specific mortgage refinance guidelines. The table below summarizes requirements based on Fannie Mae and VA loan guidelines:
| Loan Type | Min. Credit | Max LTV | Waiting Period |
|---|---|---|---|
| Conventional | 620 | 97% (rate/term) 80% (cash-out) | 6-12 months |
| FHA | 580 | 97.75% (rate/term) 80% (cash-out) | 7 months (streamline) 12 months (cash-out) |
| VA | No minimum* | 100% (IRRRL) 90% (cash-out) | 210 days (IRRRL) 12 months (cash-out) |
| USDA | 640 | 100% (streamline) | 12 months |
*Most lenders require 620+ for VA mortgage refinance
Investor Strategy: Cash-Out Mortgage Refinance for Portfolio Expansion
Many investors use cash-out mortgage refinance strategically to pull equity from existing properties and fund down payments on new acquisitions. If your property has appreciated significantly, this can be a powerful way to expand your portfolio without additional capital investment. The key is ensuring the new rental income covers the increased mortgage payment. Learn more about Fannie Mae cash-out refinance guidelines.
Mortgage Refinance FAQs
A mortgage refinance typically makes sense when you can reduce your rate by 0.75% or more, want to remove PMI, need to access equity, or want to change your loan term. Calculate your break-even point to ensure you'll stay long enough to recoup closing costs—most experts recommend planning to stay at least 3-5 years after refinancing.
The break-even point is when your cumulative monthly savings equal your closing costs. Calculate it by dividing closing costs by monthly savings. For example, $6,000 in costs divided by $200 monthly savings = 30 months to break even. After that point, your savings are pure profit. The CFPB refinance guide offers additional tools to help you decide.
Conventional mortgage refinance typically requires 620+, FHA refinances require 580+, and VA refinances have no official minimum but most lenders require 620+. Higher credit scores qualify for better rates—a score of 740+ typically gets the best pricing on your mortgage refinance.
Rate-and-term mortgage refinances typically require 5-10% equity (90-95% LTV). Cash-out refinances require at least 20% equity remaining after the cash-out (80% max LTV). VA cash-out mortgage refinance allows up to 90% LTV.
Mortgage refinance closing costs typically range from 2-6% of the loan amount. For a $400,000 loan, expect $8,000-$24,000 in costs including appraisal ($300-500), title insurance, lender fees, and other charges. These can be paid upfront, financed into the loan, or covered by a no-closing-cost option with a higher rate.
Yes, though options are more limited. FHA mortgage refinances allow scores as low as 580. If you have an existing FHA, VA, or USDA loan, streamline refinances often have more flexible credit requirements. We also work with portfolio lenders who may consider compensating factors beyond credit score alone.
Most mortgage refinances close in 30-45 days from application. Streamline refinances (FHA/VA/USDA) may close faster due to reduced documentation. Complex situations or appraisal issues can extend timelines. We work efficiently to close your mortgage refinance on time or early.
Ready to Explore Mortgage Refinance Options?
Whether you're looking to lower your payment, access equity, or optimize your investment portfolio, we'll help you determine if a mortgage refinance makes sense for your situation.