A rate-and-term refinance replaces your existing mortgage with a new loan, primarily to change the interest rate, loan term, or both. Unlike a cash-out refinance, the goal is generally to adjust your mortgage terms rather than take cash out from your home equity.

Depending on the new rate, loan balance, and term, refinancing may lower your monthly payment, reduce the total interest paid, or help you pay off your mortgage sooner.

What to consider: Compare the new loan’s closing costs, monthly payment, loan term, and total interest costs with your current mortgage. Extending the repayment term may lower your payment without necessarily reducing the total cost of borrowing.

A cash-out refinance replaces your existing mortgage with a new, larger loan and allows you to receive a portion of your available home equity as cash, subject to loan requirements and limits.

Homeowners may consider this option for home improvements, major expenses, or debt consolidation. However, using home equity to pay off other debts means those amounts become part of a loan secured by your home.

What to consider: Review the new loan balance, interest rate, closing costs, monthly payment, and long-term borrowing costs. A lower monthly payment on consolidated debt does not automatically mean you’ll pay less overall.

Learn more about Cash-Out Refinancing for Debt Consolidation

Texas has specific rules for home equity lending, including cash-out refinances commonly referred to as Texas A6 loans. These loans allow eligible homeowners to access home equity, but they are subject to requirements under Texas law that differ from those for other refinance transactions.

What to consider: Texas home equity loans have specific requirements related to eligibility, property, loan terms, and closing procedures. Review your situation with a mortgage professional familiar with Texas A6 lending before proceeding.

An FHA Streamline Refinance is designed for eligible homeowners who already have an FHA-insured mortgage. It may allow borrowers to refinance with reduced documentation or appraisal requirements, depending on the circumstances and applicable program guidelines.

The refinance must meet FHA requirements, including applicable rules regarding payment history and the benefit to the borrower.

What to consider: An FHA Streamline Refinance does not automatically eliminate mortgage insurance or guarantee a lower overall cost. Compare the new rate, mortgage insurance, closing costs, and loan term with your existing mortgage.

A traditional refinance replaces your existing mortgage. A home equity line of credit (HELOC), by contrast, generally allows you to borrow against available equity while keeping your existing first mortgage in place.

Mortgage Mark’s FHA HELOC and Flex HELOC offerings may provide alternative ways for eligible homeowners to access home equity. The requirements, structure, and costs depend on the specific product.

What to consider: Compare these options with a cash-out refinance, paying attention to interest rates, payment terms, fees, and whether the financing is secured by your home. A HELOC may have a variable rate, so payments can change.

Certain refinance programs are designed for homeowners with specific types of existing mortgages or eligibility needs. Program availability and requirements depend on the loan type, borrower qualifications, and current guidelines.

If you have a government-backed mortgage, ask whether a program specific to your existing loan may be available. For example, FHA and VA borrowers may have refinance options with requirements that differ from conventional refinancing.

What to consider: Confirm current program eligibility, costs, mortgage insurance or funding fees, and the financial benefit of refinancing before choosing an option.

The best option depends on your current mortgage and what you want to achieve. Before moving forward, compare:

• Loan structure: Are you changing your rate or term, accessing equity, or replacing a government-backed loan?
• Upfront costs: What closing costs and other expenses will you pay?
• Monthly payment: How will the new payment compare with your current obligations?
• Long-term cost: How much interest and other loan-related expenses could you pay over time?
• Eligibility: Does your financial situation and property qualify for the program?

For help evaluating the numbers, start with a Refinance Analysis. You can also read Should I Refinance? to help determine whether refinancing fits your goals.

Once you understand the main types of refinances, the next step is determining which options may fit your situation. The Mortgage Mark Team can help you review your existing mortgage, compare available loan structures, and understand the costs and requirements before you decide how to proceed.

Contact us to discuss your refinance options.