Rate-and-term refi
Lower rate or change term (30→20, etc). Same loan balance. Most common refi. Closing costs ~2-3% of loan.
Refinance · the math that decides
Refi when the math wins.
Not when the news talks.
A refinance trades closing costs today for monthly savings later. The math is honest — divide cost by savings = break-even month. Stay past break-even, refi wins. Don't? Don't refi.
· Five flavors
Pick
the right refi.
Cash-out refi
Pull equity out as cash. New loan balance = old + cash taken. Higher rate than rate-and-term. Use for value-creating purposes only (renovation, investment), not lifestyle.
Recast (not technically refi)
Pay lump sum + $250 fee → new amortization, same rate. No closing costs. Conventional + jumbo only. See /mortgage-recast.
FHA streamline
FHA-to-FHA refi without re-verifying income or assets. Faster, cheaper. Must drop your interest rate or switch from ARM to fixed.
VA IRRRL
VA's streamline equivalent. VA-to-VA refi with reduced documentation. Veterans and active-duty only.
· Break-even math
Worked example.
$280K loan, 1% drop.
- Current loan balance
- $280,000
- Current rate
- 7.25%
- New rate (after refi)
- 6.25%
- Monthly P&I savings
- $185/mo
- Closing costs (~2.5%)
- $7,000
- Break-even point
- $7,000 ÷ $185 = 38 months · ~3.2 years
- Stay <3.2 years?
- Don't refi.
- Stay >3.2 years?
- Refi wins.
· Watch-outs
Four pitfalls
in the refi pitch.
Pitfall 01
Refinancing for a 0.25% drop.
Closing costs eat the savings. The 0.75% rule of thumb exists for a reason. Run the actual break-even before signing.
Pitfall 02
Restarting the clock at year 8.
Refinancing into a fresh 30-year resets your amortization. You'll pay more total interest even with a lower rate. Consider a 20-year refi instead.
Pitfall 03
Cash-out for lifestyle.
Vacation, car, wedding paid with home equity = trading 7%-equivalent appreciation for 7%+ debt service. Bad trade. Cash-out for renovation or investment only.
Pitfall 04
Skipping the LE comparison.
Different lenders quote wildly different fees on identical loans. Always pull 3 Loan Estimates and use /tools/loan-compare to see which actually saves money.
Refi math is honest.
Refi pitches usually aren't.
We connect you to LOs who run the break-even with you on the phone. No high-pressure refinance churn.