Rate and term refinance
A rate-and-term refinance replaces your existing mortgage with a new one at a different rate, a different term, or both, without taking cash out. It is the standard move when rates have fallen since you closed, or when you want to shorten your loan.
Best for: Homeowners whose rate is meaningfully above current pricing, or who want to move from a 30-year to a 15-year term.
What makes this loan different
Lower the payment
The common case: your rate drops, the payment drops, and the saving pays back the closing costs within a predictable number of months.
Or shorten the loan
Moving from a 30-year to a 15-year term usually raises the payment but cuts total interest sharply. Worth modeling both ways rather than assuming.
Drop mortgage insurance
If your home has appreciated enough that you now hold 20% equity, refinancing from FHA to conventional can remove mortgage insurance entirely — sometimes worth more than the rate change itself.
What you'll need
- Enough equity to support the new loan amount without mortgage insurance, or willingness to carry it.
- Credit and income documentation, as with a purchase.
- An appraisal in most cases, though some loans qualify for an appraisal waiver.
- The property remains subject to North Carolina lending only.
Honest trade-offs
- Closing costs are real. The honest test is the break-even point — how many months of savings it takes to repay them — measured against how long you actually plan to stay.
- Restarting a 30-year term resets the clock, so a lower payment can still mean more total interest. Ask for both numbers.
Common questions
How much does my rate need to drop to make refinancing worth it?
There is no universal threshold — the old "one percent rule" is not a real rule. What matters is the break-even point: divide your total closing costs by your monthly saving to get the number of months to recover them, then compare that against how long you plan to keep the house. A small drop on a large balance can be worth more than a large drop on a small one.
Will refinancing reset my loan back to 30 years?
It does if you choose a new 30-year term, and that can mean paying more total interest even at a lower rate. You can refinance into a shorter term instead, or keep the 30-year for payment flexibility and pay extra voluntarily. We will show you both.
Can refinancing get rid of my mortgage insurance?
Often, yes. If you have an FHA loan and your home has appreciated enough to give you 20% equity, refinancing to a conventional loan removes mortgage insurance permanently. For homeowners who bought with FHA a few years ago, this is frequently worth more than the rate change.
Check the rules yourself
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