The short answer
Refinancing replaces your current mortgage with a new one. People refinance to change their rate or term, remove mortgage insurance, switch from adjustable to fixed, or access equity — but closing costs mean it only makes sense when the benefits outweigh the cost.
Reviewed by Jennifer Reich, Branch Manager, NMLS 162239 · Last reviewed October 16, 2026
What types of refinance are there?
Common options include:
- Rate-and-term refinance — change your rate, term, or loan type
- Cash-out refinance — borrow against equity for other goals
- FHA streamline or VA IRRRL — simplified options for existing FHA or VA loans, subject to requirements
- Refinancing to remove FHA mortgage insurance by moving to conventional, when eligible
How do you know if refinancing makes sense?
Jennifer looks at your break-even point — how long it takes for monthly savings or other benefits to cover the cost of refinancing — along with how long you plan to keep the home and loan. Sometimes the honest answer is to wait.
Questions to ask Jennifer
- What's my break-even point on closing costs?
- Would a shorter term save me money overall?
- Can I remove mortgage insurance by refinancing?
- What are the costs and risks of taking cash out?