Refinance
Rate and term refinance loans
We publish the break-even month before you sign a disclosure.
What a Rate and term refinance loan actually is
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 beyond an incidental $2,000. It is the cleanest refinance to underwrite and the cheapest to close, because loan-to-value limits are more generous and there is no cash-out pricing adjustment.
There are three honest reasons to do one: the rate has dropped enough to recover the costs inside your expected time in the home, you want to shorten a 30-year term to a 15 and can afford the payment, or you have reached 80% loan-to-value and want to leave FHA's permanent mortgage insurance behind. If none of those apply, we will tell you to stay put.
Best suited to
- Borrowers whose rate is at least 0.750% above current pricing
- Anyone carrying FHA mortgage insurance who has reached 80% loan-to-value
- Owners who want a 15 or 20 year term and can carry the payment
- Adjustable-rate borrowers approaching their first adjustment
What comes with the loan
- A written break-even analysis in months, showing costs divided by genuine monthly saving
- Comparison of a full refinance against simply recasting or making extra principal payments
- Appraisal waiver check before ordering, which on our refinance files succeeds about one time in four
- Term-shortening scenarios at 25, 20 and 15 years with total interest for each
- PMI removal analysis if you are approaching 80% loan-to-value on a conventional loan
- No lender origination fee on any rate and term refinance of a Keystone-originated loan
How a file moves
- 01
The break-even conversation
Costs divided by monthly saving equals months to recover. If that number exceeds how long you plan to stay, we say so and the conversation ends there.
- 02
Application and valuation
Full documents, then an appraisal waiver attempt. If a waiver is granted you save $625 and about nine days.
- 03
Underwriting
Refinances are usually simpler than purchases because there is no seller, no contract and no settlement date pressure.
- 04
Closing
Signed at our office or by mobile notary at your home. Primary-residence refinances carry a three business day right of rescission.
- 05
First payment
You typically skip one month of payments. That is not free money; it is interest rolled into the new balance, and we show you exactly how much.
Why borrowers choose it
Break-even stated in writing
Costs divided by real monthly saving, in months, on the first page of your comparison.
No origination fee for return clients
If Keystone originated your current loan, we waive the origination fee on a rate and term refinance.
Term shortening modeled
Every quote includes 20 and 15 year options with total interest, not just the lowest payment.
A route off FHA MIP
At 80% loan-to-value a conventional refinance ends mortgage insurance that FHA would charge for the full term.
What to watch out for
- Skipping a month of payments feels like a saving but adds interest to the balance.
- Restarting a 30-year clock can raise lifetime interest even at a lower rate. We show both totals.
- A second lien or HELOC must be resubordinated, which takes time and a fee from that lender.
Rate and term refinance questions we get asked
Still unclear? Call (215) 555-0145 and ask for the originator covering your county.
All questionsThere is no universal number. The honest test is costs divided by genuine monthly saving. On a $320,000 loan with $4,200 of costs and a $148 monthly saving, that is 29 months. If you expect to stay five years, it works. If you may move in two, it does not.
No. A rate and term refinance pays off the existing balance and nothing more. Your equity is unchanged on day one, though a new 30-year term rebuilds principal more slowly at the start than your seasoned loan does.
Yes, and it is the standard exit. Once your loan-to-value reaches 80% based on a current appraisal, a conventional refinance ends mortgage insurance entirely. On a $360,000 FHA loan that is roughly $165 a month.
On a refinance of your primary residence you have three business days after signing to cancel the transaction. Funding happens on the fourth business day. It does not apply to purchases or to investment properties.
Programs worth comparing
Cash-out refinance
To 80% LTV on one unit, 75% on two to four units
FHA and VA streamline
No appraisal, no income documents in most files
Conventional
Conforming loans to $832,750 with cancellable PMI
Find out if Rate and term refinance fits
Fifteen minutes, a soft credit pull, and a straight answer about which program actually suits your file.
No application fee. Soft credit pull at pre-qualification. Flat $1,095 origination at closing.