Home / Refinance
Home refinanceRefinance your mortgage to lower your rate, change your term, or take cash out
Refinancing replaces your current mortgage with a new one. Homeowners refinance to cut the monthly payment, pay the loan off faster, remove mortgage insurance, or tap equity. UMortgage+ powered by NEXA Lending, LLC compares rate-and-term, cash-out, FHA Streamline, and VA IRRRL options and shows your break-even point before you decide.
NMLS #1660690
Why are you refinancing?
Rate & term
Lower your interest rate, shorten to a 15-year, or both. Keep or reduce your loan balance.
Rate & term details →Cash-out
Pull equity for renovations, debt consolidation, education, or reserves while resetting your rate and term.
Cash-out details →FHA Streamline
Refinance an existing FHA loan with reduced docs. Often no appraisal and a lower rate.
FHA Streamline →VA IRRRL
VA Interest Rate Reduction Refinance Loan: streamline your VA loan with a net tangible benefit.
VA IRRRL details →The refinance process in 4 steps
Goals & quote
Tell us your goal: lower payment, shorter term, cash out, or streamline. We price options and estimate break-even.
Apply & disclose
Submit the application. You receive Loan Estimate disclosures and we order the appraisal when required.
Underwriting
We verify income, assets, title, and (when needed) the appraisal. Streamlines like IRRRL need fewer docs.
Close & fund
Sign closing documents. Your new loan pays off the old one. First payment on the new loan is typically the following month.
Which refinance fits?
| Option | Best for | Typical docs | Appraisal? |
|---|---|---|---|
| Rate & term | Lower payment or shorter term | Full income & assets | Usually yes |
| Cash-out | Accessing equity | Full income & assets | Yes |
| FHA Streamline | Existing FHA borrowers | Reduced | Often no |
| VA IRRRL | Existing VA borrowers | Reduced; net tangible benefit | Often no |
| HELOC / HELOAN | Keep your first mortgage rate | Often automated / no-doc* | Automated AVM* |
*Product terms vary. Confirm current NEXA guidelines. HELOC timelines are typical, not guaranteed.
The break-even point (and the 2% rule)
Refinancing is usually worth it when your monthly savings recover the closing costs before you plan to move or refinance again. That date is your break-even point.
The old "2% rule" (refinance only when rates drop two full points) is outdated. On a larger balance, a 0.5–1% drop can pay off if you'll stay long enough. Run the break-even calculator, then confirm with a personalized quote.
Open break-even calculatorExample (illustrative only)
Loan balance $300,000. Closing costs $6,000. Monthly savings $150.
Break-even: $6,000 ÷ $150 = 40 months.
If you'll keep the loan longer than 40 months, the refinance may pay for itself. Your numbers will differ.
Not a rate quote or loan offer. APR, fees, and savings depend on your credit, loan type, and market rates.
Refinancing: FAQs
What is refinancing a mortgage?
Refinancing pays off your current mortgage with a new loan, usually from a different (or the same) lender. You get new terms: rate, term length, and sometimes a different loan balance if you take cash out or roll in closing costs.
How much does it cost to refinance a $300,000 mortgage?
Closing costs typically run about 2–5% of the loan amount, roughly $6,000–$15,000 on $300,000. That covers lender, appraisal, title, and recording fees. Costs can often be rolled into the loan or offset with lender credits. FHA Streamline and VA IRRRL refinances can cost less.
Is the 2% rule still valid?
No. Waiting for a full 2-point drop is outdated advice. What matters is your break-even: months until monthly savings cover closing costs. A smaller rate drop can still make sense on a larger loan or if you lengthen your intended stay.
How much of a rate drop is worth refinancing?
Enough that you recover costs before you sell or refinance again. Run the math: closing costs ÷ monthly savings = break-even months. Also weigh non-rate goals like removing PMI, shortening the term, or switching from an ARM to fixed.
Can I refinance with less than 20% equity?
Yes. Conventional rate-and-term refinances can go up to about 97% LTV, FHA about 97.75%, and FHA Streamline / VA IRRRL often need no appraisal. Cash-out usually requires keeping at least ~20% equity (VA cash-out allows higher LTV).
What are common refinancing mistakes?
Skipping the break-even math, extending a nearly paid-off loan back to 30 years without a plan, ignoring lender fees vs. third-party fees, cashing out more than you need, and refinancing so often that you never build equity. Also: don't shop rates without comparing APR and total costs.
What disqualifies you from refinancing?
Recent late mortgage payments, a credit score below the program minimum, debt-to-income above guidelines, insufficient equity (especially for cash-out), title issues, or a property that doesn't meet appraisal standards. Streamlines have fewer hurdles but still require occupancy and net tangible benefit rules (VA IRRRL).
Purchase vs. refinance rates: why do they differ?
Lenders price purchase and refinance loans differently. Purchase loans sometimes have slight pricing advantages; refinances may carry higher LLPA adjustments depending on credit, LTV, and loan type. Always compare a live quote for your scenario rather than an advertised average.
Educational answers only. Not a loan offer or commitment to lend.
See if refinancing saves you money
Get a personalized quote from a loan officer, or call (480) 233-7897.