Arizona Rate and TermRefinance

A rate and term refinance replaces your current mortgage with a new one that has a different interest rate, a different term, or both. The new loan pays off the old one at closing. What you don't do is pull money out — the balance only changes to cover your payoff and allowed closing costs.

No. Taking cash at closing makes it a cash-out refinance, which carries different limits and pricing. If you want to tap your equity, that's the page to read — cash-out rules like Fannie Mae's 12-month waiting period don't apply to a rate-and-term loan.

Closing costs for a refinance typically run about 3% to 6% of the loan amount — a national figure from the Federal Reserve's consumer guide; actual fees vary by lender, county, and loan size. On a $300,000 loan, that's roughly $9,000 to $18,000. Costs include origination fees, the appraisal, title search, and credit report fees, and many can be rolled into the new balance if you have the equity for it.

There's no single equity requirement — it depends on the program. Conventional rate-and-term refinances generally allow up to 95% LTV on a primary home (up to 97% when you're refinancing a loan Fannie Mae already owns or securitizes), and FHA allows up to 97.75% on a primary home you've owned and occupied for 12 months. Above 80% LTV, a conventional loan usually carries PMI — so 20% equity is the number that matters for skipping that insurance.

Most lenders still require a 620 minimum for a conventional refinance, and pricing improves in steps — the very best conventional pricing starts around a 780 score. As of November 2025, Fannie Mae no longer applies a minimum credit score to loans approved through Desktop Underwriter; eligibility rides on overall risk. FHA sets no credit-score floor for streamline refinances, so those can go lower.

Under the federal Truth in Lending Act, you have 3 business days after closing (or after you receive the required disclosures, if that comes later) to cancel a refinance of your principal residence, at no cost. The right comes from federal law, enforced by the CFPB. Home purchases don't carry it, and Arizona's DIFI licenses mortgage brokers and bankers and takes complaints if something goes wrong.

No law limits how many times you can refinance. Timing rules come from the program instead. FHA streamlines require 210 days since closing, six payments made, and six full months since the first payment was due; VA requires the later of six consecutive payments or 210 days after the first payment due date. Conventional rate-and-term loans have no agency minimum, though many lenders ask for about six months — and refinancing a Fannie Mae loan into a cash-out requires the existing loan to be at least 12 months old.

Often, yes. Private mortgage insurance on a conventional loan ends when the balance reaches 78% of the home's original value automatically, or 80% at your request. If your home has appreciated, a refinance that lands at 80% LTV or below comes with no PMI at all — the insurance simply doesn't exist on the new loan.

Run the payment math before you decide. A 15-year loan usually prices lower and cuts total interest by tens of thousands — the Federal Reserve's own example shows $137,520 less interest on a $200,000 loan — but the monthly payment runs higher. If the payment doesn't fit your budget, many lenders offer custom terms that match the years you have left.

Yes, and it's one of the most common reasons homeowners refinance. A fixed-rate loan locks your principal-and-interest payment for the life of the loan, so an upcoming rate adjustment stops being your problem. It's most compelling when your ARM resets within a couple of years and you plan to stay put.

Expect to gather recent pay stubs, W-2s, and tax returns (two years is the common ask), about two months of bank statements, your current mortgage statement, your homeowner's insurance declarations page, and a government-issued ID. Self-employed borrowers typically document income with two years of business returns. Your lender's list wins if it differs.

Most refinances close in about 30 to 45 days, though four to six weeks is common. Streamlined loans can move faster; appraisal scheduling and documentation gaps are the usual slowdowns. That range is a market estimate — no government agency publishes a closing-time standard.

For 2026, the baseline conforming limit is $832,750 for a one-unit home, $1,066,250 for two units, $1,288,800 for three, and $1,601,750 for four — and every Arizona county sits at the baseline. Conventional loans above these limits are jumbo loans, with different requirements.

Lenders price your rate off your credit score, the loan-to-value ratio, the property type, the loan size, and the term you pick — and rates move daily with the bond market. Two neighbors with identical homes can see different offers. The calculator on this page runs your numbers; a real quote runs your full picture.