A Rate and Term Refinance also lets you change your loan type to better suit your financial goals.

For example, if you originally purchased your home with an FHA loan and have since built more equity or improved your credit score, you may be able to refinance into a conventional loan. This switch can save you money each month by eliminating FHA mortgage insurance.

Similarly, if you currently have an adjustable-rate mortgage and want to avoid the risk of future interest rate changes, refinancing into a fixed-rate loan can lock in your monthly payment for the life of the loan.

Remove Mortgage Insurance

Mortgage insurance on conventional loans typically ends when you reach 22% equity in your home. A Rate and Term Refinance can help you accelerate this process if your home’s value has risen since purchase.

For instance, home renovations or market appreciation can increase your equity. After ordering an appraisal to confirm the new home value, refinancing can allow you to remove mortgage insurance sooner, saving you money each month.

Remove a Co-Signer

Sometimes, buyers add a co-signer to help qualify for a mortgage or purchase a more expensive home. If you initially needed a co-signer but can now qualify on your own, a Rate and Term Refinance can remove the co-signer from your loan, giving you full control and responsibility over your mortgage.

Cons

Closing Costs
One potential drawback of refinancing is the closing costs, which may include fees for appraisal, title, and underwriting. Before moving forward, weigh the benefits of refinancing against these costs to ensure it’s a smart financial decision.

As another option, we also guide clients on the possibility of doing a  “no-cost” refinance options. If you can avoid out-of-pocket closing costs, even a small interest rate reduction can still be worthwhile.

Longer Time Until Loan Payoff

If you refinance into a loan with a longer term than what’s left on your current mortgage, your payoff date will be extended. This means it will take more time to fully own your home and pay off your mortgage completely.

How Does Refinancing Your Mortgage Work?

STEP 1 – Request Your Free Refinance Analysis
Share details about your home’s current value, your existing interest rate, and the remaining balance on your mortgage so we can evaluate your options.

STEP 2 – Review Your Documents
Our team will guide you on whether now is the right time to refinance and outline potential benefits. You’ll complete a simple questionnaire and submit financial documents—such as pay stubs, bank statements, and proof of homeowner’s insurance—through our secure online application.

STEP 3 – Lock In Your New Interest Rate
After receiving your application, we can help lock in a competitive interest rate. We continuously monitor market rates and will notify you of any significant changes, locking in your rate only after your confirmation.

STEP 4 – Submit Your File to Underwriting
Your loan file is then sent to underwriting for approval. You’ll receive a detailed loan statement showing closing costs. At this stage, we’ll also order an appraisal to verify your home’s current market value.

STEP 5 – Sign Your Documents & Fund Your New Mortgage Loan
The final step is attending a signing appointment to complete your closing documents, including the Promissory Note with your new loan terms. Most refinances include a three-day waiting period after signing, giving you the option to cancel if needed. Once the waiting period ends, your new loan will fund, and your previous mortgage will be fully paid off.

Your first mortgage payment will typically be due 1 to 2 months after closing. Overall, the entire refinance process usually takes about 30 to 45 days from start to finish.