Refinance · Rate, Term & Cash-Out
Refinancing replaces your current mortgage with a new one — to lower your rate, shorten your term, or turn equity into cash. Here's how to tell if it's worth it, and what Texas's unique cash-out rules mean for you.
The basics
Refinancing means paying off your existing mortgage with a new one, ideally on better terms. People refinance for three main reasons: to lower their interest rate and monthly payment, to shorten their loan term and pay off the home sooner, or to pull cash out of their built-up equity.
A rate-and-term refinance focuses on the loan itself — a lower rate, a different term, or moving from an adjustable to a fixed rate for stability. A cash-out refinance replaces your mortgage with a larger one and gives you the difference in cash, useful for renovations, debt consolidation, or other goals.
The key question with any refinance is the break-even point: how long it takes for your monthly savings to cover the closing costs. If you'll stay in the home past that point, refinancing usually makes sense. We run that math with you honestly — sometimes the answer is 'not yet,' and we'll tell you so.
Best suited for
✓ Homeowners whose rate is above today's market
✓ Anyone wanting to pay off their home sooner
✓ Tapping equity for renovations or consolidation
✓ Moving from an adjustable to a fixed rate
✓ Dropping FHA mortgage insurance via conventional refi
The math
Four factors decide whether a refinance pays off. We'll run your real numbers — including the Texas cash-out rules — before you commit to anything.
Texas cash-out
This is where Texas differs from everywhere else. A cash-out refinance on your primary home is a Texas 50(a)(6) home-equity transaction — the same constitutional protections that govern a HELOC apply here too.
On a Texas cash-out refinance of your homestead, your total mortgage can't exceed 80% of the home's fair market value — preserving a 20% equity cushion by constitutional rule.
Like a Texas home-equity loan, a cash-out refinance on your primary residence requires the 12-day notice-to-closing waiting period. Build it into your timeline.
A straight rate-and-term refinance (no cash out) is not a 50(a)(6) transaction and isn't bound by the 80% cap or waiting period. Only pulling equity triggers the home-equity rules.
Texas law (§50(f)(2)) provides a path to later refinance a home-equity loan into a standard rate-and-term mortgage if conditions are met — sometimes improving your terms down the road.
The full set of Texas 50(a)(6) protections — closing location, one-at-a-time, non-recourse — apply to cash-out too. Our HELOC page breaks each one down in plain English.
This page is reviewed by Jonathan Sarver, a licensed Texas loan officer. Have a question about your specific situation in Austin or the Hill Country? Reach out directly — a real person, licensed in Texas, will answer.
Answers
The key number is your break-even point: divide your total closing costs by your monthly savings to see how many months it takes to recoup the cost. If you'll stay in the home beyond that point, refinancing typically makes sense. We run this calculation with you before you commit.
Yes — significantly. A cash-out refinance on your primary residence is a Texas 50(a)(6) home-equity transaction, subject to the 80% loan-to-value cap and the 12-day waiting period, among other constitutional protections. A rate-and-term refinance with no cash out is not bound by those rules.
On a homestead cash-out, Texas caps your total mortgage debt at 80% of the home's fair market value. So your maximum cash-out is roughly 80% of the value minus your current loan balance, subject to lender approval.
Often, yes. If you've built enough equity and have qualifying credit, refinancing from an FHA loan into a conventional loan can eliminate FHA mortgage insurance — which, unlike conventional PMI, frequently lasts the life of the FHA loan. We'll check whether the numbers work for you.
A rate-and-term refinance timeline is similar to a purchase. A Texas cash-out (50(a)(6)) refinance includes the mandatory 12-day waiting period plus a 3-day right to cancel after closing, so plan for a somewhat longer timeline on cash-out.
Ready when you are
Get an honest break-even analysis — including the Texas cash-out rules — from a licensed Texas loan officer. If it's not worth it yet, we'll tell you.
Run my refinance numbersThis is not a commitment to lend. All loans subject to credit approval, income and asset verification, and property appraisal. Rates and terms vary and are not guaranteed.