Lower Your Rate or Shorten Your Term

Rate-and-term refinancing lets you reduce your interest rate, lower your payment, or pay off your Texas home faster – without taking cash out.

What Is a Rate-and-Term Refinance?

A rate-and-term refinance replaces your current mortgage with a new one to improve your interest rate or loan term – without taking cash out. You might refinance from 7% to 5.5% to lower your payment, or switch from a 30-year to a 15-year term to pay off your home faster and save on interest. This is the most common type of refinance for Texas homeowners looking to optimize their mortgage.

Who Is Rate-and-Term Refinancing For?

Texas homeowners with rates higher than current market rates
Borrowers who want to lower their monthly payment
Homeowners who want to pay off their mortgage faster
Those with ARMs who want to lock in a fixed rate
Borrowers with improved credit who now qualify for better rates
Homeowners with FHA loans who want to remove mortgage insurance

Key Benefits of Rate-and-Term Refinancing

Lower Interest Rate

Reduce your rate by 0.5-2% and save thousands over your loan term.

Lower Monthly Payment

Free up cash flow with a reduced mortgage payment.

Pre-Underwriting Process

Q Mortgage pre-underwrites your refinance for complete certainty.

Pay Off Faster

Switch to a 15 or 20-year term to build equity and save on interest.

Remove Mortgage Insurance

Refinance FHA to conventional to eliminate PMI when you have 20% equity.

How Rate-and-Term Refinancing Works

Step 1: Determine Your Goal

Decide if you want to lower your rate, reduce your payment, or shorten your term.

Step 2: Get Pre-Underwritten

Q Mortgage pre-underwrites your refinance to confirm your rate, payment, and approval.

Step 3: Home Appraisal

An appraiser confirms your home's current value to verify equity.

Step 4: Lock Your New Rate

We lock in your new interest rate to protect against market increases.

Step 5: Final Underwriting

We finalize your loan and prepare closing documents.

Step 6: Close Your Refinance

Sign your documents, and your old mortgage is replaced with better terms.

Refinance Requirements

Credit score typically 620+ (higher scores get better rates)
Sufficient equity (at least 5-20% depending on loan type)
Debt-to-income ratio under 45-50%
Steady employment and income verification
Property must be in Texas and meet appraisal standards
No late mortgage payments in past 12 months (preferred)
Closing costs typically 2-5% of loan amount (can be rolled into the loan)

Common Rate-and-Term Refinance Scenarios

Refinance If:

Consider Waiting If:

Frequently Asked Questions

How much can I save with a rate-and-term refinance?

Lowering your rate from 7% to 6% on a $300,000 loan saves about $200 per month and $70,000+ over 30 years.

What is the difference between rate-and-term and cash-out refinance?

Rate-and-term refinances your loan without taking cash out (just changing rate or term). Cash-out refinances give you cash from your equity and typically have slightly higher rates.

Should I refinance from 30-year to 15-year?

If you can afford the higher payment, switching to a 15-year term saves you tens of thousands in interest and builds equity faster.

How long does rate-and-term refinancing take?

With Q Mortgage pre-underwriting, you will have certainty quickly. Full refinancing typically takes 30-45 days.

Can I refinance with less than 20% equity?

Yes. You can refinance with as little as 5% equity, though you may pay mortgage insurance until you reach 20%.

What are closing costs for refinancing?

Closing costs typically range from 2-5% of the loan amount. On a $300,000 refinance, expect $6,000-$15,000 (which can be rolled into the loan).

What is the break-even point?

Divide closing costs by monthly savings. If costs are $6,000 and you save $200 per month, you break even in 30 months.

Does Q Mortgage pre-underwrite rate-and-term refinances?

Yes. We pre-underwrite all refinances so you know your rate, payment, and approval status before committing.

Stop Overpaying on Your Mortgage Today

Rate-and-term refinancing is one of the smartest financial moves you can make if rates have dropped or your situation has improved. Lower your payment, pay off your home faster, or lock in a fixed rate. At Q Mortgage, we pre-underwrite your refinance upfront so you know exactly what you qualify for.