What it is
What a Refinance actually is.
A refinance is a powerful tool when used correctly. Rate-and-term refis lower your rate and/or shorten your term. Cash-out refis pull equity out. Streamline refis (FHA, VA) skip the appraisal and most documentation.
The right refi for you depends on three things: where rates are today, where they are likely to go, and how long you plan to stay in the home.
The only test that matters on a refinance is the break-even: closing costs divided by monthly savings, measured against how long you intend to stay. A refinance that has not reached break-even by the time you sell has cost you money, however good the new rate looked.
Who it suits
Borrowers this program is built for.
None of these is a rule, and matching every line does not qualify anybody. They are the situations where this program tends to be the one worth pricing first.
- Homeowners with rates above current market
- Borrowers who want to remove PMI
- Owners shortening from 30 to 15 year
- Anyone with a substantial change in financial profile since original loan
What it gives you
The parts that make it worth choosing.
Lower Rate
On a large balance held for a long time, a one-point rate reduction compounds into a substantial number. On a small balance, or one sold in three years, it may not cover the closing costs. The calculators on this site run the comparison.
Remove PMI
Refinance to conventional once you reach 20% equity.
Shorten Term
Move from 30 to 15 year and pay less interest over time.
Cash Out (separate program)
Pull equity for renovations, college, debt consolidation.
How the process runs
4 stages, in order.
This is the shape of a real file, written for a demonstration. Any timeline, fee or turnaround named below is invented for the example and is not a commitment — no step here can actually be started, because Copperline Home Loans does not exist and holds no license.
- Break-Even AnalysisClosing costs divided by monthly savings gives the month the refinance turns positive. If you sell before it, the refinance lost money.
- ApplyStandard mortgage application — most refis run smoother than a purchase.
- AppraiseAppraisal confirms current home value.
- CloseOn an owner-occupied refinance there is also a three-day right of rescission after signing, before the loan funds.
Questions