TurkMortgages.com (a team of NEXA Mortgage, LLC) · Ethan Morgan NMLS #2738407 · NEXA Mortgage, LLC Corp NMLS #1660690
Lower your rate, shorten your term, eliminate PMI, or remove FHA MIP — without taking cash out. The most straightforward refinance with the broadest eligibility in Texas.
A rate and term refinance replaces your existing mortgage with a new loan that has a lower interest rate, different term, or both — without pulling any cash out of your home. It is the simplest and most common type of refinance, and critically, it is not subject to Texas's strict Section 50(a)(6) homestead cash-out rules that cap LTV at 80% and impose cooling-off periods.
The goal is straightforward: reduce your monthly payment, total interest cost, or both. You can also use a rate/term refinance to change your loan type — for example, switching from an FHA loan to conventional (to remove lifetime MIP), from an ARM to a fixed rate, or from a 30-year to a 15-year term.
In Texas, rate/term refinances are available for conventional, FHA, VA, and USDA loans — each with its own guidelines. The most important distinction from a Texas cash-out refinance: no 80% LTV cap, no 12-month waiting period, no 12-day cooling-off period.
Texas's famous homestead protection rules (Section 50(a)(6)) apply only to cash-out refinances. A rate/term refinance has none of these restrictions — no 80% LTV cap, no 12-day waiting period, no mandatory in-person closing, no 12-month seasoning requirement. This makes rate/term refinances significantly simpler and faster to close in Texas than cash-out refinances.
| Situation | Rate Drop Needed | Typical Break-Even | Recommendation |
|---|---|---|---|
| Bought 2022–2024 at 7%+ rate | 0.75–1.0%+ drop | 18–30 months | Strong candidate — act now |
| FHA loan with lifetime MIP | Any rate | Depends on MIP savings | Refinance to conventional at 20% equity |
| ARM adjusting soon | Minimal | Immediate protection | Lock into fixed before adjustment |
| Credit score improved 80+ pts | 0.5%+ likely available | 20–30 months | Run the numbers — likely worth it |
| Want to shorten term (30→15yr) | Rate may rise slightly | Interest savings long-term | Only if payment increase is manageable |
| Plan to sell within 2 years | Any | Won't break even in time | Usually not worth closing costs |
| Rate 0.25% lower available | 0.25% | 5–7+ years | Borderline — depends on loan size and stay |
*Minor cash back at closing (up to $2,000 on conventional) may be permitted due to rounding of payoff amounts. FHA allows slightly different tolerance. Consult Ethan for your specific scenario.
| Loan Type | Min Credit | Max LTV | Seasoning | Appraisal | Key Notes |
|---|---|---|---|---|---|
| Conventional | 620 | 97% | None required | Usually required (PIW available) | Most flexible; PMI if LTV >80% |
| FHA Rate/Term | 580 | 97.75% | 6+ payments made | Required (unless Streamline) | MIP continues unless refi to conv. |
| FHA Streamline | 580 (varies) | N/A (no appraisal) | 6+ payments | Not required | Reduced docs; no cash out |
| VA IRRRL | 620 (lender) | 100%+ | 6+ payments | Not required | Veterans only; lowest refi option |
| USDA Streamlined | 580+ | No LTV limit | 12 months | Not required | Rural areas only; must be current |
| Credit Score | Typical 30-yr Refi Rate | vs 760+ Base | Monthly Cost on $350K | 30-yr Interest Premium |
|---|---|---|---|---|
| 760+ | 6.125% | Base rate | $2,127/mo | Baseline |
| 740–759 | 6.325% | +0.20% | $2,171/mo | +$15,840 |
| 720–739 | 6.525% | +0.40% | $2,215/mo | +$31,680 |
| 700–719 | 6.725% | +0.60% | $2,259/mo | +$47,520 |
| 680–699 | 6.975% | +0.85% | $2,314/mo | +$67,320 |
| 660–679 | 7.325% | +1.20% | $2,390/mo | +$94,680 |
| 640–659 | 7.775% | +1.65% | $2,491/mo | +$131,040 |
| 620–639 | 8.275% | +2.15% | $2,606/mo | +$172,440 |
*Rates for illustration. A 100-point credit score improvement can save $100–$200+/month and $30,000–$60,000 over 30 years on a $350,000 loan.
If your score is in the 640–680 range, spending 3–6 months improving it to 700+ before refinancing can save you 0.5–1.0% in rate — worth $15,000–$35,000 over the life of a $350K loan. Ask Ethan about rapid rescore options that can boost your score in 5–30 days.
All scenarios use April 2026 market rates for illustration. Contact Ethan for current, personalized rate quotes.
W-2 · 740 credit · From 7.375% to 6.25% · $380,000 balance
Refinance FHA → Conventional · 680 credit · $295,000 balance
760 credit · $320,000 balance · Lower rate + shorter term
7/1 ARM adjusting in 8 months · 720 credit · $340,000 balance
Score went from 640 → 720 since purchase · $290,000 balance
Rate drop too small or plan to sell soon
Break-Even Point = Total Closing Costs ÷ Monthly Savings
This tells you the number of months it takes for your refinance savings to pay back the upfront costs. If you plan to stay in the home longer than the break-even period, refinancing saves you money. If you'll sell or refinance again before break-even — it likely doesn't make sense.
Monthly P&I savings = $285. Closing costs = $7,600. Break-even = $7,600 ÷ $285 = 26.7 months (about 2.2 years). If you plan to stay 5+ years, you'll save $285 × 36 extra months = $10,260 net. Over 30 years: $94,000+ in interest savings.
Assumes 2% closing costs. Monthly savings are P&I only. Break-even in months.
| Loan Balance | 0.25% Drop | 0.50% Drop | 0.75% Drop | 1.00% Drop | 1.50% Drop |
|---|---|---|---|---|---|
| $200,000 | 96 mo | 48 mo | 32 mo | 24 mo | 16 mo |
| $300,000 | 64 mo | 32 mo | 21 mo | 16 mo | 11 mo |
| $400,000 | 48 mo | 24 mo | 16 mo | 12 mo | 8 mo |
| $500,000 | 38 mo | 19 mo | 13 mo | 10 mo | 6 mo |
| $700,000 | 27 mo | 14 mo | 9 mo | 7 mo | 5 mo |
Green = break-even under 24 months — generally considered a strong refinance candidate. Above 48 months = think carefully about whether you'll stay long enough.
Texas homeowners who bought in 2022–2023 at rates above 7% are prime refinance candidates in 2026 as rates have declined to the 6–6.5% range. With rates potentially declining further to 5.9% by Q4 2026 (Fannie Mae forecast), some homeowners choose to refinance now and refinance again later — each time it makes mathematical sense. Waiting for the "perfect bottom" is a gamble; locking in savings today while planning to refinance again if rates drop further is a valid strategy.
| Strategy | Upfront Cost | Monthly Payment | Best For |
|---|---|---|---|
| Pay Closing Costs Upfront | $5,000–$8,000 | Lowest possible rate | Staying 3+ years, want max savings |
| Roll Costs into Loan | $0 out of pocket | Slightly higher (larger balance) | Limited cash, staying long-term |
| No-Cost via Lender Credit | $0 | Higher rate (0.25–0.50%+) | Selling/refinancing within 2–3 years |
If you believe rates will fall further in 2026–2027, a no-closing-cost refinance now (accept a slightly higher rate, lender credits cover costs) lets you save money immediately without the risk of overpaying for an optimization you'll need to repeat. When rates drop again, refinance again — still no out-of-pocket cost. This is a common strategy in declining rate environments.
As a NEXA Mortgage broker, Ethan shops 200+ wholesale lenders simultaneously. Below are the key NEXA wholesale partners for rate & term refinances — you never deal with these lenders directly; Ethan handles everything.
Retail banks mark up refinance rates because they control the pricing. NEXA's wholesale access means Ethan sees the same lender's wholesale rate sheet — typically 0.25–0.50% lower than what that lender offers retail customers. On a $380,000 refi, that 0.375% difference = $85/month or $30,600 over 30 years.
| Factor | NEXA Broker (Ethan) | Current Servicer / Retail Bank |
|---|---|---|
| Pricing | Wholesale — 0.25–0.50% typically lower | Retail — margin built in |
| Lender options | 200+ lenders — best rate wins | One option — take it or leave it |
| Loyalty discount | N/A — better to shop | Rarely meaningful (0.125% max) |
| Appraisal waiver | Available via UWM PIW program | May not offer |
| Personal service | Ethan — direct line, Turkish & English | Call center rotation |
| Speed | 14–21 days typical | 30–45 days typical |
Texas's strict homestead rules — 80% LTV cap, 12-day cooling-off, in-person closing required, 12-month seasoning — apply ONLY to cash-out refinances (50(a)(6)). A rate/term refinance (no cash out) avoids all of these. This is a major advantage for Texas homeowners: you can refinance any time, at any LTV up to program limits, without the cash-out restrictions.
If your existing mortgage was a Texas cash-out (50(a)(6)) loan, refinancing it into a rate/term refi is called a "50(f)(2) refinance." This is allowed but has specific rules: the 80% CLTV limit still applies, 12-month seasoning is required, and the 12-day notice period applies. Once a Texas cash-out loan, the property remains subject to homestead equity rules even in subsequent rate/term refinances. Always disclose to your lender if your current loan is a Texas equity loan.
| Phase | Standard | Expedited | Notes |
|---|---|---|---|
| Application to Processing | 1–3 days | Same day | Have all documents ready |
| Appraisal (if required) | 7–14 days | 5–7 days (rush) | PIW can eliminate entirely |
| Underwriting | 3–7 business days | 24–48 hrs (priority) | Clean file = fastest |
| Conditions Cleared | 2–4 days | 1–2 days | Respond immediately to UW requests |
| CD Issued to Closing | 3 business days (required) | 3 days (mandated) | Federal law — cannot be waived |
| 3-Day Rescission | 3 business days | 3 days (mandated) | Primary residence — TX right to cancel |
| Total: Application to Funded | 21–30 days | 14–17 days | FHA Streamline / VA IRRRL often faster |
| Refi Type | Existing Loan | Key Benefit | Docs Required | Appraisal | Credit |
|---|---|---|---|---|---|
| Conventional Rate/Term | Any loan type | Best rates for 620+ credit, no MIP | Full documentation | Usually (PIW possible) | 620+ |
| FHA Streamline | FHA only | Minimal docs, no income verification | Reduced | Not required | 580+ |
| FHA Rate/Term | Any → FHA | 580+ credit, high LTV (97.75%) | Full documentation | Required | 580+ |
| VA IRRRL | VA only | No appraisal, no income docs, veterans | Reduced | Not required | 620 (lender) |
| VA Rate/Term | Any → VA | 0 down equity, no PMI, veterans | Full | Required | 620+ |
| USDA Streamlined | USDA only | Rural homeowners, no appraisal | Reduced | Not required | 580+ |
FHA loan holders only · Fastest FHA refi path
Veterans only · The easiest refi in the market
Ethan provides a free break-even analysis for every Texas homeowner considering a refinance. Get the numbers in one call — Turkish & English.