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Determine your goals

Refinancing can lower your monthly payment, help pay your mortgage off faster or let you consolidate debt with a cash-out refi.
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Lock your loan

Most homeowners refinance for a new, lower interest rate, but rates change daily. Apply to refinance as soon as you’re ready and lock your new mortgage rate.
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Run the numbers

Refinancing has more variables than just a new interest rate. Run the numbers so you can know how your monthly payment and mortgage terms may change.
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Close on your refi

Closing on a refinance should feel familiar. You’ll have an appraisal, go through underwriting and then close the mortgage. But this time you’ve already moved in.
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Refinancing a mortgage involves replacing an existing mortgage with a new one, usually to achieve better terms or take advantage of changes in the financial landscape. Here are some common reasons people choose to refinance their mortgages:
  1. Lower Interest Rates: One of the primary reasons for refinancing is to secure a lower interest rate. If interest rates have dropped since you initially took out your mortgage, refinancing can help you reduce your monthly payments and overall interest costs.
  2. Change in Loan Term: Some individuals may refinance to switch from a longer-term mortgage to a shorter-term one (e.g., from a 30-year to a 15-year mortgage) to pay off the loan faster or to extend the term for lower monthly payments.
  3. Debt Consolidation: Refinancing can be a way to consolidate high-interest debt, such as credit card balances or personal loans, into a mortgage with a lower interest rate. This can result in lower overall monthly payments.
  4. Cash-Out Refinance: Homeowners may choose to do a cash-out refinance, which allows them to tap into their home’s equity and receive a lump sum of cash. This money can be used for various purposes, such as home improvements, debt consolidation, or other financial needs.
  5. Adjustable Rate to Fixed Rate: If you initially have an adjustable-rate mortgage (ARM) and want the stability of a fixed interest rate, refinancing to a fixed-rate mortgage can provide a predictable monthly payment.
  6. Removing Private Mortgage Insurance (PMI): If you’ve gained enough equity in your home, refinancing can help eliminate the need for private mortgage insurance, which is often required for borrowers with a down payment of less than 20%.
Here are some additional tips to help streamline the refinancing process and potentially expedite the timeline:
  1. Organize Financial Documents: Ensure you have all the necessary financial documents in order. This may include pay stubs, tax returns, bank statements, and any other documents that lenders may require. Having these readily available can speed up the application process.
  2. Maintain Good Credit: Your credit score plays a significant role in the refinancing process. Before applying, check your credit report for any errors and work on improving your credit score if needed. A higher credit score can often result in better loan terms and a smoother approval process.
  3. Choose the Right Lender: Research and choose a reputable lender with a track record of efficient and transparent refinancing processes. Read reviews, ask for recommendations, and consider lenders with a history of positive customer experiences.
  4. Stay in Communication: Maintain open and clear communication with your lender. Respond promptly to any requests for additional information or documentation. Proactive communication can help address issues quickly and keep the process on track.
  5. Understand the Terms and Conditions: Familiarize yourself with the terms and conditions of the refinancing agreement. Understanding the terms can help you make informed decisions and avoid potential delays due to misunderstandings.
  6. Be Realistic About Timing: While refinancing can often be completed within 30 days, it’s essential to be realistic about potential delays. Factors such as high demand in the housing market, increased loan volume, or external events can impact processing times.
  7. Consider a Lock-In Rate: If interest rates are favorable, you may consider locking in your interest rate. This can protect you from rate increases during the application process, especially if the market is volatile.
By taking these steps, you can contribute to a smoother and potentially faster refinancing process. Keep in mind that individual circumstances may vary, and it’s advisable to consult with your lender for specific guidance tailored to your situation.