[{"data":1,"prerenderedAt":391},["ShallowReactive",2],{"site-navigation":3,"jd-power-global":94,"U3155RynEB":104,"e39XklTYXt":120,"disclosure-default":143,"spanish-language-disclosure":150,"J1MihCHS9H":157,"SEeE09FmpH":173,"tag-cash-out-refi":201,"tag-articles-cash-out-refi":206},{"_path":4,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"bottomSiteNavigationLinks":8,"mainSiteNavigationLinks":34,"footerSiteNavigationLinks":40,"socialLinks":64,"headerNavigation":75,"_id":89,"_type":90,"title":91,"_source":92,"_file":93,"_extension":90},"/settings/site-navigation","settings",false,"",[9,13,17,21,25,29],{"text":10,"to":11,"textEs":12},"Calculators","/calculators","Calculadoras",{"text":14,"to":15,"textEs":16},"Rates","/rates","Tasas",{"text":18,"to":19,"textEs":20},"Buy","/home-buying","Comprar",{"text":22,"to":23,"textEs":24},"Refinance","/refinancing","Refinanciar",{"hideFromSiteMap":6,"text":26,"to":27,"textEs":28},"Equity","/equity","Valor neto",{"text":30,"to":31,"hideFromSiteMap":32,"textEs":33},"Education & Tools","/education-and-tools",true,"Cursos y herramientas",[35,36,37,38,39],{"text":10,"to":11,"textEs":12},{"text":14,"to":15,"textEs":16},{"text":18,"to":19,"textEs":20},{"text":22,"to":23,"textEs":24},{"text":26,"to":27,"textEs":28},[41,44,48,52,56,60],{"text":42,"to":43},"Citi.com","https://www.citi.com",{"text":45,"to":46,"textEs":47},"Sitemap","/sitemap","Mapa del Sitio",{"text":49,"to":50,"textEs":51},"Accessibility","https://online.citi.com/US/JRS/portal/template.do?ID=Accessibility","Accesibilidad",{"text":53,"to":54,"textEs":55},"Privacy Policy","https://online.citi.com/US/JRS/portal/template.do?ID=Privacy","Política de Privacidad",{"text":57,"to":58,"textEs":59},"Terms & Conditions","https://online.citi.com/US/nga/termsdisclaimer/termsdisclaimerhome","Términos y condiciones",{"text":61,"to":62,"textEs":63},"Do Not Sell or Share My Personal Information","https://online.citi.com/US/ag/dataprivacyhub/cpra/home","No vender ni compartir mi información personal",[65,68,72],{"to":66,"text":67,"icon":67},"https://www.facebook.com/citibank","Facebook",{"to":69,"text":70,"icon":71},"https://x.com/Citibank","X, formally known as Twitter","X",{"to":73,"text":74,"icon":74},"https://www.youtube.com/citi","YouTube",{"utilityNavigation":76},[77,84],{"link":78,"variant":82,"icon":83},{"text":79,"to":80,"textEs":81},"Apply now","#dragonflyapp","Solicitar Ya","primary",null,{"link":85,"variant":88},{"text":86,"to":87},"{{tracking_code}}","tel:{{tracking_code}}","primary-outline","content:settings:site-navigation.json","json","Site Navigation","content","settings/site-navigation.json",{"title":95,"subtext":7,"portraitImage":96,"imageAlt":97,"imageWidth":98,"background":99,"borderRadius":100,"maxWidth":101,"paddingTopBottom":102,"paddingLeftRight":102,"gap":102,"variant":103},"Citi is #1 in Customer Satisfaction with Mortgage Origination - ***[J.D. Power 2025 Award](https://www.jdpower.com/business/awards)***","/media/jdpower-trophy.png","J.D. Power 2025 Trophy",48,"var(--brand-default)",0,650,16,"default",{"data":105,"body":107,"toc":117},{"title":7,"description":106},"Citi is #1 in Customer Satisfaction with Mortgage Origination - J.D. Power",{"type":108,"children":109},"root",[110],{"type":111,"tag":112,"props":113,"children":114},"element","p",{},[115],{"type":116,"value":106},"text",{"title":7,"searchDepth":118,"depth":118,"links":119},2,[],{"data":121,"body":123,"toc":141},{"title":7,"description":122},"For J.D. Power 2025 award information, visit jdpower.com/awards.",{"type":108,"children":124},[125],{"type":111,"tag":112,"props":126,"children":127},{},[128,130,139],{"type":116,"value":129},"For J.D. Power 2025 award information, visit ",{"type":111,"tag":131,"props":132,"children":136},"a",{"href":133,"rel":134},"https://www.jdpower.com/business/awards",[135],"nofollow",[137],{"type":116,"value":138},"jdpower.com/awards",{"type":116,"value":140},".",{"title":7,"searchDepth":118,"depth":118,"links":142},[],{"_path":144,"_dir":145,"_draft":6,"_partial":6,"_locale":7,"slug":103,"content":146,"_id":147,"_type":90,"title":148,"_source":92,"_file":149,"_extension":90},"/disclosures/default","disclosures","This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.\n\nTerms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.","content:disclosures:default.json","Default","disclosures/default.json",{"_path":151,"_dir":145,"_draft":6,"_partial":6,"_locale":7,"content":152,"slug":153,"_id":154,"_type":90,"title":155,"_source":92,"_file":156,"_extension":90},"/disclosures/spanish-language-disclosure","\u003Csup>†\u003C/sup>Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.\n\n\u003Cspan lang=\"es\">Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.\u003C/span>","spanish-language-disclosure","content:disclosures:spanish-language-disclosure.json","Spanish Language Disclosure","disclosures/spanish-language-disclosure.json",{"data":158,"body":160,"toc":171},{"title":7,"description":159},"This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.",{"type":108,"children":161},[162,166],{"type":111,"tag":112,"props":163,"children":164},{},[165],{"type":116,"value":159},{"type":111,"tag":112,"props":167,"children":168},{},[169],{"type":116,"value":170},"Terms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.",{"title":7,"searchDepth":118,"depth":118,"links":172},[],{"data":174,"body":176,"toc":199},{"title":7,"description":175},"†Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":108,"children":177},[178,189],{"type":111,"tag":112,"props":179,"children":180},{},[181,187],{"type":111,"tag":182,"props":183,"children":184},"sup",{},[185],{"type":116,"value":186},"†",{"type":116,"value":188},"Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":111,"tag":112,"props":190,"children":191},{},[192],{"type":111,"tag":193,"props":194,"children":196},"span",{"lang":195},"es",[197],{"type":116,"value":198},"Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.",{"title":7,"searchDepth":118,"depth":118,"links":200},[],{"label":202,"slug":203,"seo":204},"Cash-Out Refi","cash-out-refi",{"description":205},"Learn more about Cash-Out Refi with helpful articles, tools, and guides to support your homeownership journey.",[207,264,309,352],{"_path":208,"_dir":209,"_draft":6,"_partial":6,"_locale":7,"readTime":210,"l1":209,"linkNav":211,"heroMedia":215,"teaserImage":218,"slug":220,"sections":221,"date":237,"subheadline":238,"headline":239,"dateModified":240,"isFeatured":6,"tags":241,"link":244,"seo":247,"hasSectionNavigation":32,"_id":250,"_type":90,"title":251,"_source":92,"_file":252,"_extension":90,"tagsDetails":253},"/articles/home-loans/heloc-vs-cash-out-refinance","home-loans",4,{"introText":212,"text":213,"to":214},"Ready for the next step?","Connect with a Citi Specialist","/contact",{"landscape":216,"portrait":217},"/media/heloc-vs-cash-out-refi-mobile-768x512.jpg","/media/heloc-vs-cash-out-refi-desktop-520x638.jpg",{"src":219},"/media/heloc-vs-cash-out-refi-teaser-500x500.jpg","heloc-vs-cash-out-refinance",[222,225,228,231,234],{"title":223,"content":224},"What is a cash-out refinance?","[A cash-out refinance](/refinancing/articles/cash-out/) lets you replace your current mortgage with a new, larger loan, and you pocket the difference in cash. You’ll begin repaying the new loan right away, typically at a fixed interest rate.\n\nThis option can be a smart move if you need a lump sum for a major expense and want a lower interest rate than a credit card or personal loan. Homeowners often use a cash-out refi for things like:\n\n* Home renovations\n* Debt consolidation\n* Funding a second property or business investment\n\nIt may also be a good option if you want to switch from an [adjustable-rate mortgage](/home-loans/adjustable-rate/) (ARM) to a fixed-rate loan for more predictable payments.\n\nJust a heads-up: cash-out refinances come with [closing costs,](/home-buying/articles/closing-costs/) and the math might not work in your favor if you already have a low mortgage rate.\n\nThinking about it? Be sure to run the numbers first. Use our [cash-out refinance](/calculators/cash-out-refinance/) calculator to see if it makes sense for you.",{"title":226,"content":227},"What is a HELOC?","A HELOC is a flexible, revolving line of credit secured by your home. You’re approved for a set credit limit and can borrow from it as needed during the draw period (typically 10 years). You’ll only pay interest on the amount you use.\n\nA HELOC can be a good option if you:\n\n* Want access to funds over time\n* Prefer to keep your existing mortgage in place\n* Are comfortable with a variable [interest rate](/rates/)\n\nHELOCs are especially useful for ongoing or phased home improvements, or emergency expenses and unexpected costs. You can learn more about how a home equity line of credit works in our [comprehensive HELOC guide](/home-loans/heloc/).\n\n::callout{title=\"Refinancing to Fund Home Renovations\" body=\"Both HELOCs and cash-out refis can help you fund home upgrades, but they work in different ways. If you’re tackling a major renovation with a clear budget, a cash-out refi might make more sense. You’ll get a lump sum up front and predictable monthly payments. Planning a phased project or want more flexibility? A HELOC lets you borrow as needed and only pay interest on the amount you’ve borrowed during the draw period.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::",{"title":229,"content":230},"Key differences between a cash-out refinance vs. HELOC","Here's a quick guide to help you compare.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"Cash-Out Refi\"},{\"value\":\"HELOC\"}]' :rows='[{\"column\":{\"valueOne\":\"Replaces Mortgage\",\"valueTwo\":\"Yes\",\"valueThree\":\"No, it’s a second loan\"}},{\"column\":{\"valueOne\":\"Funds Disbursed\",\"valueTwo\":\"Lump sum\",\"valueThree\":\"As needed\"}},{\"column\":{\"valueOne\":\"Interest Rate\",\"valueTwo\":\"Typically fixed\",\"valueThree\":\"Typically variable\"}},{\"column\":{\"valueOne\":\"Monthly Payments\",\"valueTwo\":\"Full mortgage payment\",\"valueThree\":\"Interest only or principal and interest payments\"}},{\"column\":{\"valueOne\":\"Upfront Costs\",\"valueTwo\":\"Higher, closing costs\",\"valueThree\":\"None to little\"}},{\"column\":{\"valueOne\":\"Best For\",\"valueTwo\":\"One-time large expenses\",\"valueThree\":\"Ongoing, flexible access to funds\"}}]'}\n::",{"title":232,"content":233},"Is it better to refinance or get a HELOC?","The choice between a cash-out refinance and a HELOC depends on how much you need, when and how you want to repay it. A cash-out refinance gives you a lump sum up front, and usually, a fixed interest rate. In contrast, a HELOC works like a revolving credit line: you borrow only what you need, when you need it, and repay as you go—typically with a variable rate.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Don’t confuse a HELOC with a [home equity loan](/home-loans/home-equity/). While both use your home as collateral, a home equity loan provides a lump sum typically with a fixed interest rate. A HELOC, by contrast, is a revolving credit line you can tap into as needed, usually with a variable rate and interest-only or principal and interest payments during the draw period.\"}\n::\n\n\\\nMany homeowners compare HELOC vs. refi, or HELOC vs. cash-out refi, to find the best terms. Others weigh traditional refinance or HELOC against alternatives like home equity loans to determine which fits their goals best. This article covers various [refinancing options](/calculators/refinance/) in more depth.\n\n::content-table{:useBullets=false headline=\"Cash-Out Refinance vs. HELOC\" :tableData='[{\"row\":[{\"column\":\"CASH-OUT REFI\"},{\"column\":\"HELOC\"}]},{\"row\":[{\"column\":\"Want a lump-sum up front\"},{\"column\":\"Want to borrow gradually or as needed\"}]},{\"row\":[{\"column\":\"Prefer a fixed rate with predictable monthly payments\"},{\"column\":\"Are OK with a variable rate\"}]},{\"row\":[{\"column\":\"Don't mind replacing your current mortgage\"},{\"column\":\"Prefer to keep your curret mortgage\"}]},{\"row\":[{\"column\":\"Have a major one-time expense\"},{\"column\":\"Need flexibility for ongoing or unpredictable expenses\"}]}]'}\n::\n\nYour long-term plans can also help guide the decision. If you expect to stay in your home for years to come—or you think interest rates may go up—a cash-out refi might lock in a better deal. If flexibility is more important, a HELOC may be the smarter path.",{"title":235,"content":236,"hideTitle":32},"Cash-out refinance vs. HELOC FAQs ","::faq{headline=\"Cash-out refinance vs. HELOC FAQs \" :faqs='[{\"question\":\"What’s the difference between a HELOC and a cash-out refinance?\",\"answer\":\"A HELOC is a separate line of credit you can draw from over time or as needed. A cash-out refinance replaces your existing mortgage with a larger one and gives you the difference in cash up front.\"},{\"question\":\"Which has lower interest rates: a HELOC or a cash-out refi?\",\"answer\":\"HELOCs can have a lower introductory rate and a lower interest rate compared to a mortgage.  The rates are variable, they are based off of the Prime rate, which can go up or down over time. Cash-out refinances usually have a higher rate, but they’re typically fixed, offering more stability.\"},{\"question\":\"Can I get a HELOC with bad credit?\",\"answer\":\"It’s possible, but you’ll likely face higher rates, stricter terms or a lower credit limit. Improving your credit score first can help you qualify for better terms.\"},{\"question\":\"Is a HELOC or cash-out refinance better for paying off debt?\",\"answer\":\"If you need a lump sum, want a fixed rate and prefer predictable payments, a cash-out refinance may be the better choice. A HELOC offers more flexibility, but the variable rate can make it harder to predict your repayment costs over time.\"}]'}\n::","2025-09-04T08:48:00.000Z","Thinking about tapping into your home equity? Two popular options are a cash-out refinance and a HELOC (home equity line of credit). With a cash-out refinance, you replace your existing mortgage with a new one—usually at a different rate—and take out a lump sum of cash at closing. A HELOC works more like a credit card: you borrow only what you need, when you need it, and repay as you go. Choosing the right option depends on your financial goals, interest rate environment, and how you plan to use the funds. This guide helps you compare both so you can make an informed decision.","Should I get a cash-out refinance or HELOC?","2026-08-07T09:56:00.000Z",[242,243,203],"refinancing","refinance-types",{"introText":245,"body":246,"text":213,"to":214},"Need help deciding between a HELOC or cash-out refinance?","Let’s talk it through together.",{"description":248,"title":249},"Not sure whether to choose a HELOC or a cash-out refinance? Learn the pros, cons, and key differences to help decide what’s best for your financial goals. ","Cash-Out Refi & HELOC Options for You | Citi Mortgage","content:articles:home-loans:heloc-vs-cash-out-refinance.json","Heloc Vs Cash Out Refinance","articles/home-loans/heloc-vs-cash-out-refinance.json",[254,256,260],{"label":202,"slug":203,"seo":255},{"description":205},{"label":257,"slug":243,"seo":258},"Refinance Types",{"description":259},"Explore guides and tools around refinance types including when to refinance and how to maximize your savings.",{"label":261,"slug":242,"seo":262},"Refinancing",{"description":263},"Learn more about refinancing with helpful articles, tools, and guides to support your homeownership journey.",{"_path":265,"_dir":242,"_draft":6,"_partial":6,"_locale":7,"readTime":266,"l1":242,"heroMedia":267,"teaserImage":270,"outro":7,"slug":272,"sections":273,"date":294,"subheadline":295,"headline":296,"dateModified":297,"isFeatured":32,"tags":298,"link":299,"seo":302,"_id":305,"_type":90,"title":306,"_source":92,"_file":307,"_extension":90,"tagsDetails":308},"/articles/refinancing/cash-out",8,{"landscape":268,"portrait":269},"/media/article-cash-out-refinancing-guide-mobile-768x512.jpg","/media/article-cash-out-refinancing-guide-desktop-520x638.jpg",{"src":271},"/media/article-cash-out-refinancing-guide-teaser-500x500.jpg","cash-out",[274,276,279,282,285,288,291],{"title":223,"content":275},"Ever thought about tweaking your mortgage to get some extra cash in hand? That's exactly what a cash-out refinance can do for you.\n\nAs the name suggests, this type of refinancing allows you to take cash out of your home by swapping out your existing mortgage for a brand new one that's actually worth more than what you currently owe. Why? Because the difference between the new loan amount and your old mortgage balance ends up in your pocket at closing. This process is similar to the [usual refinance](/refinancing/articles/rate-and-term), but with the sweet bonus of cash upfront. So, if you're looking to get a lump sum for that big project or purchase, a cash-out refinance might just be the ticket.\n\n::callout{title=\"Cash-out refinancing in action\" body=\"Let’s say your home is worth $300,000 and you owe $150,000 on your mortgage. You could get a new, refinanced loan for $200,000, use $150,000 of the loan to pay off your mortgage balance, then pocket the remaining $50,000 in cash.\" :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::\n\nJust remember, because this option replaces your existing mortgage, you’ll have to account for new cash-out refinance rates (either [fixed](/home-loans/fixed-rate) or [adjustable](/home-loans/adjustable-rate)), new loan terms and a new payment schedule.\n\n### How much cash can you get from a cash-out refinance?\n\nCurious about how much cash you could pocket with a cash-out refinance? It really boils down to a few key factors: the [current market value of your home](/home-buying/articles/home-appraisal), your credit score, and the specific policies of your lender.\n\nLenders typically allow you to borrow up to 80% of your home's value, minus whatever you still owe on your existing mortgage. For example, if your home is valued at $300,000 and you owe $150,000, you could potentially get up to $90,000 in cash through a cash-out refinance—provided you meet all the necessary qualifications and adhere to the lender's conditions.\n\nYou can exceed 80%, but mortgage insurance may apply. In this case, if you have a favorable rate, it could be a good idea to keep your rate and take cash out using a [HELOC](/home-loans/heloc).\n\nHave a [VA loan](/home-loans/va-loan)? They’re the exception to the 80% rule. The Veteran's Administration doesn't have restrictions on the LTV, but lenders can impose their own restrictions. They typically cap it at 90%. That limit also includes the VA funding fee, if applicable.\n\n::tip{icon=\"Bulb\" title=\"Pro Tip\" text=\"If you have a VA loan, you're in for even better news. The Veterans Administration lets eligible veterans refinance up to 100% of their home's value. So, for veterans, the cash-out option can be particularly powerful!\"}\n::",{"title":277,"content":278},"Calculate your cash-out refinance","To see how much cash you might be able to get, start with the current market value of your home. Then, subtract the amount you still owe on your mortgage. The remaining equity is what lenders look at when they determine your loan amount.\n\nWant to skip the math? Use our handy [Cash-Out Refinance Calculator](/calculators/cash-out-refinance).",{"title":280,"content":281},"Cash-out refinance requirements","When you're looking into a cash-out refinance, you'll find that the requirements can vary quite a bit from one lender to another. It's always best to have a chat with your bank to get the nitty-gritty details. However, we can guide you through some general guidelines to keep in mind:\n\n### Debt-to-income ratio\n\nWhenever you apply for a loan, your [debt-to-income ratio (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio) is a big player in the approval game. This ratio measures your total monthly debt payments against your monthly income. To get the thumbs up for a cash-out refinance, most lenders like to see a DTI of 50% or lower. But remember, each lender is different, so double-checking is a good idea.\n\nCurious about your DTI? Here’s a simple way to figure it out: Add up all your monthly debt payments, divide that total by your gross monthly income (that's before taxes), and voila! Convert that number into a percentage, and you've got your DTI.\n\n### Credit score\n\nA higher credit score doesn't just open doors to a cash-out refinance—it can also snag you a lower interest rate, which is a big plus since it affects the overall cost of your refinanced loan. Most lenders look for a credit score of at least 620. Not sure where you stand? It's a good idea to check your credit score on each of the three major credit bureaus, TransUnion, Equifax and Experian. Any dips in your score could influence your eligibility and the terms of your loan.\n\n### Home equity\n\nHome equity is basically the part of your home that you truly \"own.\" The more equity you have, the more cash you might be able to get your hands on through a cash-out refinance. Lenders usually prefer that you keep at least 20% equity in your home after refinancing.\n\n### Seasoning requirement\n\nDespite the name, “mortgage seasoning” has nothing to do with your tastebuds. So, what is it? Mortgage seasoning basically refers to the age of a mortgage, meaning how long you’ve had the loan.\n\nFor a cash-out refinance on a [conventional mortgage](/home-loans/conventional-mortgage-loan/), most lenders require you to own your home for six months before you qualify, no matter how much home equity you’ve built up. For [FHA loans](/home-loans/fha-loan), there’s a 12-month seasoning requirement, while [VA loan](/home-loans/va-loan) borrowers need to wait a minimum of 210 days.\n\nThis helps banks manage the risk of a loan—it shows them that your home’s property value is stable, and you’ve been making on-time payments like the good financial citizen you are.",{"title":283,"content":284},"Pros and cons of a cash-out refinance","A cash-out refinance can be a great solution for homeowners who want cash on-hand for big expenses. But, like everything in life, there are tradeoffs. Here are a few pros and cons to consider before taking the plunge:\n\n::content-table{:tableData='[{\"row\":[{\"column\":\"PROS\"},{\"column\":\"CONS\"}]},{\"row\":[{\"column\":\"Provides access to cash, which you can use however you want: home renovations, medical bills, college tuition, retirement expenses—you name it.\"},{\"column\":\"Increases the total amount owed on your mortgage, potentially extending the time it takes to pay off your home.\"}]},{\"row\":[{\"column\":\"Many cash-out refinance rates are lower than other types of loans, like personal loans or credit cards, so you could save on interest over time.\"},{\"column\":\"Refinancing involves closing costs, typically 2-5% of the loan amount. These costs can be rolled into the new loan amount, but they’re still a significant expense.\"}]},{\"row\":[{\"column\":\"Interest paid on a cash-out refinance can sometimes be tax-deductible, especially if you use the cash for home improvements.\"},{\"column\":\"It will increase the unpaid balance amount. It’s important to borrow only what you need.\"}]}]'}\n::",{"title":286,"content":287},"Alternatives to a cash-out refinance","If a cash-out refinance doesn't seem quite right, you have a couple of other options:\n\n* **Traditional refinance**: You can refinance almost any kind of loan through a traditional refinance also called a [rate and term refinance](/refinancing/articles/rate-and-term). This involves changing your loan terms, switching to a different loan type, lowering your rate or even changing your lender.\n* **Home Equity Line of Credit (HELOC)**: A [HELOC](/home-loans/heloc) works a bit like a credit card but uses your home equity as the credit line. It's a flexible option that lets you draw funds as needed, and you only pay interest on the amount you use. Whether you need to fund a big project or handle unexpected expenses, a HELOC gives you the freedom to access your funds when you need them.",{"title":289,"content":290},"Does cash-out refinancing make sense for you?","It’s a big decision and whether a cash out refinance is the right move depends a lot on your personal situation, your financial goals and what you plan to do with the extra cash. Let's break it down to see if it makes sense for you:\n\n* **Lower interest rates**: If [current interest rates](/rates) are lower than when you first got your mortgage, you might be in a good spot. Just remember, cash-out refinance rates could be a bit higher than standard refinance rates due to the increased risk of a larger loan amount.\n* **Using the cash wisely**: Think about how you'll use the extra money. Are you looking to improve your financial standing or increase your home's value? If so, cashing out could be a great move. But it's always important to consider how long it will take to pay off the new loan.\n* **The million dollar question—is it worth it?**: Weigh up how many years are left on your current loan versus the term of the new loan. Look at the current interest rates, what your new monthly payment would be, and figure out your breakeven point. That's when you'll have made back the money you spent on the refinancing process. Our [cash-out refinance calculator](/calculators/cash-out-refinance) can help you crunch the numbers.\n\nOur advice? Weigh your options carefully and talk to a mortgage specialist who can guide you to the best solution for you.",{"title":292,"hideTitle":32,"content":293},"Cash out refinancing FAQs","::faq{headline=\"Cash out refinancing FAQs\" :faqs='[{\"question\":\"Should you get a cash-out refinance to invest?\",\"answer\":\"Deciding whether to get a cash-out refinance to invest can hinge on several factors, such as your financial stability, the cost of the refinance and the potential returns from your investment. For instance, if you're considering using the cash from a refinance to invest in the stock market, real estate or a business venture, it's crucial to weigh the expected returns against the costs of refinancing, which might include higher interest rates and closing costs.  For example, if the market is bullish, investing in stocks might yield a higher return compared to the interest rate on your new mortgage. However, these markets can be volatile, and there's a risk element to consider. On the other hand, if you're thinking about investing in real estate, the return might be more stable and could also provide rental income, which could help cover the new mortgage payments.  Consulting with a financial advisor to analyze these aspects in detail would be a good first step.\"},{\"question\":\"Is a cash-out refinance a good option for consolidating debt?\",\"answer\":\"Using a cash-out refinance for debt consolidation can be effective in certain cases as it allows you to pay off high-interest debts, such as credit card balances and personal loans, and consolidate them into a single, lower-interest mortgage payment. This can simplify your finances, reduce your monthly payment amount, and potentially save you money on interest in the long run. However, remember that you are securing this new debt against your home, which means if you fail to keep up with payments, there is a risk to your property. It's wise to ensure that the refinanced mortgage is manageable within your budget.\"}]'}\n::","2024-09-11T14:41:00.000Z","You may be familiar with a [traditional refinance](/refinancing/articles/rate-and-term), but have you heard of a cash-out refinance? It’s a handy way to turn your home equity into a ready-to-use lump sum of cash. So, how does a cash-out refinance work? Let us explain.","Cash-out refinance guide: how it works and what you need to know","2026-05-06T18:00:00.000Z",[203],{"introText":300,"text":213,"to":214,"body":301},"Ready to look into a cash-out refinance?","We can help you crunch the numbers.",{"title":303,"description":304},"Cash-Out Refinance Guide: What to Know","Get the essentials on cash-out refinancing. Learn how it works, current rates, and key steps to take when considering a cash-out refinance for your home.","content:articles:refinancing:cash-out.json","Cash Out","articles/refinancing/cash-out.json",[254],{"_path":310,"_dir":242,"_draft":6,"_partial":6,"_locale":7,"readTime":311,"l1":242,"linkNav":312,"heroMedia":313,"teaserImage":316,"slug":318,"disclosure":103,"sections":319,"date":335,"subheadline":336,"headline":337,"isFeatured":6,"tags":338,"link":340,"seo":343,"hasSectionNavigation":32,"_id":346,"_type":90,"title":347,"_source":92,"_file":348,"_extension":90,"tagsDetails":349},"/articles/refinancing/how-much-does-it-cost-to-refinance-a-mortgage",9,{"introText":212,"text":213,"to":214},{"landscape":314,"portrait":315},"/media/how-much-does-it-cost-to-refinance-mobile-768x512.jpg","/media/how-much-does-it-cost-to-refinance-desktop-520x638.jpg",{"src":317},"/media/how-much-does-it-cost-to-refinance-teaser-500x500.jpg","how-much-does-it-cost-to-refinance-a-mortgage",[320,323,326,329,332],{"title":321,"content":322},"What is the average mortgage refinance cost?","Let’s get right to the main question: What's the average cost to refinance a home loan?\n\nMost homeowners will pay between 2% and 6% of the new loan amount, which is similar to the remaining balance on your original mortgage. On an average mortgage, that’s about $5,000 to $15,000 in [closing costs](/home-buying/articles/closing-costs/). The exact amount depends on a few key factors, like your loan size, credit profile, income, location and the lender you choose.\n\nEvery lender has its own fee structure, and third-party costs can vary by state. And here’s the kicker: These costs are usually due at closing, on top of your regular monthly mortgage payment. Some lenders may offer options to roll them into your new loan, but they’re still part of the overall cost.\n\nWant a clearer picture of what it might cost you to refinance? Use our [Mortgage Refinance Calculator ](/calculators/refinance/)to get an estimate and compare your current loan to a new one.",{"title":324,"content":325},"Common mortgage refinance fees","Refinancing your mortgage means replacing your current loan with a new one, and just like your original mortgage, it comes with a few upfront costs. Think of it as hitting the reset button—paperwork and all. Most refinance costs fall into three main buckets:   \n\n* Lender fees\n* Third-party fees\n* Prepaid costs \n\nSome mortgage refinance fees are standard, while others vary based on your lender, loan size or location. But guess what? A few of them are negotiable. Knowing the average refinance fees helps you spot inflated costs, compare lender offers with confidence and make sure you’re getting the best deal possible.\n\n### Lender fees: origination, application and more \n\nThese are the fees charged directly by your lender—the cost of getting your new loan off the ground.  \n\nHere’s what’s typically included:\n\n* **Loan origination fee:** This is the big one. It’s what your lender charges to evaluate and process your loan. Most fall between 0.5% and 1% of your total loan amount.\n* **Application fee:** Some lenders charge a fee just to start the process of opening your file, pulling your credit and getting things underway for your refinance. This fee can range from $75 to $500, depending on the lender. Think of it as the \"kickoff\" fee that gets the whole process moving.\n* **Underwriting fee:** This covers the cost of the [underwriting](/home-buying/articles/what-is-mortgage-underwriting/) team that reviews your financials and decides if you’re approved. It’s the engine behind the loan decision, and it typically ranges from $400 to $900.\n\nThese fees can vary, and some lenders may even waive one or more, especially if you have great credit or bring a competing offer to the table. It never hurts to ask for a waiver.\n\n#### Typical Lender Fees\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Fee\"},{\"value\":\"Range\"}]' :rows='[{\"column\":{\"valueOne\":\"Loan origination fee\",\"valueTwo\":\"0.5%-1% of loan amount\"}},{\"column\":{\"valueOne\":\"Application fee\",\"valueTwo\":\"$75-$500\"}},{\"column\":{\"valueOne\":\"Underwriting fee\",\"valueTwo\":\"$400-$900\"}}]'}\n::\n\n### Third-party fees: appraisal, title, credit check \n\nNot all refinance costs come from your lender. Some fees go to outside professionals who handle key steps in the process. These third-party charges are typically passed on to you as part of your closing costs. Here’s a quick look at the most common ones:   \n\n* **[Appraisal](/home-buying/articles/home-appraisal/):** A licensed appraiser will estimate your home’s current market value, so the lender knows how much it’s worth. You can expect to pay $300 to $600.\n* **Title search and insurance:** A title search confirms that you legally own your home and that there are no claims or liens on it. Title insurance protects the lender (and you) if a title issue pops up later. Typical costs range from $400 to $900.\n* **Credit report fee:** This covers the cost of pulling your credit report during the application process. This usually runs between $25 and $50.\n* **Recording fees:** These are charged by your local city or county to officially record your new mortgage in public records. The exact amount varies depending on your location.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP:\" text=\"Ask for a refinance loan closing estimate early on. It will itemize both lender and third-party fees, making it easier to compare offers side by side.\"}\n::\n\n### Prepaid costs: taxes, interest & escrow\n\nPrepaid costs are expenses you pay in advance to help ensure your mortgage is set up smoothly from day one. These aren’t lender profit—they’re just part of managing your loan properly. Still, they do affect how much cash you’ll need at closing.\n\nHere’s what to look for:\n\n* **Prepaid [property taxes](/home-buying/articles/are-property-taxes-included-in-mortgage-payment/):** Depending on your local tax schedule, you may need to pay a portion of your property taxes in advance to stay current.\n* **Prepaid interest:** This covers the interest due between your closing date and your first mortgage payment. It helps bridge the gap so that your loan starts on the right schedule.\n* **Initial [escrow ](/home-buying/articles/what-is-escrow/)contribution:** If your lender manages your property taxes and insurance, which is common, you’ll likely need to make an initial deposit (usually a few months’ worth) into your new escrow account.\n* These amounts can vary by location and your closing date, but they’re an important part of your total refinance cost.",{"title":327,"content":328},"Example cost to refinance a home loan","Still wondering what it all adds up to? Let’s look at a real-world example.\n\nSay you’re refinancing a mortgage with $300,000 remaining. You have strong credit, and your fees are in the average range. In that case, your total closing costs might come out to around 2% of the loan amount—or $6,000. Here’s how that may break down:\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Fee type\"},{\"value\":\"Estimated cost\"}]' :rows='[{\"column\":{\"valueOne\":\"Loan origination\",\"valueTwo\":\"$2,000\"}},{\"column\":{\"valueOne\":\"Application and underwriting\",\"valueTwo\":\"$800\"}},{\"column\":{\"valueOne\":\"Appraisal\",\"valueTwo\":\"$400\"}},{\"column\":{\"valueOne\":\"Title and recording fees\",\"valueTwo\":\"$800\"}},{\"column\":{\"valueOne\":\"Credit report\",\"valueTwo\":\"$30\"}},{\"column\":{\"valueOne\":\"Prepaid taxes and interest\",\"valueTwo\":\"$1,970\"}},{\"column\":{\"valueOne\":\"Estimated Total\",\"valueTwo\":\"$6,000 (2%)\"}}]'}\n::\n\nKeep in mind: This is just one scenario. Your actual costs might be higher or lower depending on your lender, where you live and how you structure your loan.\n\n::callout{title=\"What is a cash-out refinance?\" body=\"A cash-out refinance replaces your existing mortgage with a new, larger one and lets you take the difference in cash. It’s a way to tap into your home’s equity and use it for things like home renovations, debt consolidation or other major expenses. Your total loan balance goes up and you’ll still pay closing costs, but you walk away with cash in hand while keeping just one mortgage payment.\" image=\"/media/article-callout-portrait.jpg\" :media='{\"portrait\":\"\",\"landscape\":\"\"}'}\n::",{"title":330,"content":331},"How to lower the mortgage refinance cost","If you remember one thing from this article, let it be this: You have options. Refinancing costs aren’t always set in stone, and with a few smart moves, you can significantly reduce what you pay at closing.  \n\n Here are some of the best ways to save: \n\n* **Shop around:** Refinance fees and interest rates can vary a lot from one lender to the next. Get quotes from multiple lenders and be sure to compare current mortgage rates before you start.\n* **Ask about lender incentives:** Some lenders run promotions—like reduced fees, cash back at closing or discounted rates—to win your business. You won’t know unless you ask.\n* **Negotiate:** See a charge that looks vague or high? Ask for a breakdown—or ask to have it removed. Lenders may be willing to match or beat competitor offers, especially if you have a Loan Estimate to show.\n* **Consider points and credits:** Want a lower interest rate? You can pay [discount points ](/rates/articles/what-are-mortgage-points/)up front. Prefer lower out-of-pocket costs? Ask about lender credits, which reduce your closing costs in exchange for a slightly higher rate.\n* **Improve your credit score:** Even a modest bump can unlock better rates and lower fees.\n* **Time it right:** Mortgage rates fluctuate daily. If you’re not in a rush, waiting for a rate drop could lead to big savings over the life of your loan.\n\n::tip{icon=\"Mortgage\" title=\"PRO TIP:\" text=\"If you plan to refinance again or move within 5 years, paying higher upfront costs might not be worth it.\"}\n::",{"title":333,"hideTitle":32,"content":334},"Refinancing costs FAQs","::faq{headline=\"Refinancing costs FAQs\" :faqs='[{\"question\":\"How much does it cost to refinance a mortgage in 2026?\",\"answer\":\"Refinancing typically costs between 2% and 6% of your loan amount, which works out to about $5,000 to $15,000 for the average homeowner.\"},{\"question\":\"What fees are required when refinancing?\",\"answer\":\"You can expect to pay: lender fees (origination, application, underwriting), third-party fees (appraisal, title, credit check, recording), and prepaid costs (taxes, insurance, interest, escrow contributions).\"},{\"question\":\"Can I refinance without paying closing costs?\",\"answer\":\"Yes—with a no-closing-cost refinance, the lender covers the upfront fees by charging you a slightly higher interest rate or adding the costs to your loan balance. It reduces what you pay today, but may increase the total amount of interest over time.\"},{\"question\":\"Are refinance fees negotiable?\",\"answer\":\"Some are. Lender fees, like origination, application and underwriting, are often negotiable. Third-party fees (such as title or appraisal) are less flexible, but shopping around and comparing loan estimates can help you find the most competitive offer.\"},{\"question\":\"What’s the break-even point on a refinance?\",\"answer\":\"Your break-even point is how long it takes for your monthly savings to equal your upfront refinance costs. For example, if you spend $3,000 to refinance and save $150 a month, you’d break even in 20 months\"}]'}\n::","2026-06-23T09:09:00.000Z","**Key insights:**  \n\n* When you refinance a mortgage, you essentially swap your current loan with a new one  \n* Refinancing may have several benefits depending on your situation, such as a lower interest rate, lower monthly payments or a shorter loan term.  \n* The average cost to refinance is 2–6% of the new loan amount \n\nRefinancing a mortgage usually costs between 2% and 6% of the new loan amount. These costs cover lender fees, third-party charges and prepaid items like taxes and interest. When you [refinance your mortgage](/refinancing/), you’re essentially swapping your current home loan for a new one. Doing so can lock in a lower interest rate, [lower your monthly payment ](/home-loans/articles/how-to-lower-mortgage-payment/)or change the loan term. It’s a common move for homeowners looking to save money over time or adjust their financial strategy. Just like your original loan, refinancing comes with closing costs. Understanding these costs ahead of time can help you decide if refinancing makes financial sense for your situation.","How much does it cost to refinance a mortgage?",[339,242,203],"refinancing-process",{"introText":341,"body":342,"text":213,"to":214},"Ready to refinance?","We’re here to help you crunch the numbers.",{"title":344,"description":345},"How Much Does It Cost to Refinance a Mortgage? (2026 Guide) | Mortgage.com","Learn the real mortgage refinance cost—from lender fees to closing costs. Understand what affects your total and how to reduce your expenses.","content:articles:refinancing:how-much-does-it-cost-to-refinance-a-mortgage.json","How Much Does It Cost To Refinance A Mortgage","articles/refinancing/how-much-does-it-cost-to-refinance-a-mortgage.json",[254,350,260],{"label":351,"slug":339},"Refinancing Process",{"_path":353,"_dir":242,"_draft":6,"_partial":6,"_locale":7,"readTime":266,"l1":242,"linkNav":354,"heroMedia":355,"teaserImage":358,"slug":360,"sections":361,"hideFooterJdPower":6,"date":377,"subheadline":378,"headline":379,"isFeatured":6,"tags":380,"link":381,"seo":384,"hasSectionNavigation":32,"_id":387,"_type":90,"title":388,"_source":92,"_file":389,"_extension":90,"tagsDetails":390},"/articles/refinancing/understanding-mortgage-refinancing",{"introText":212,"text":213,"to":214},{"landscape":356,"portrait":357},"/media/understanding-mortgage-refinancing-mobile.jpg","/media/understanding-mortgage-refinancing-desktop.jpg",{"src":359},"/media/understanding-mortgage-refinancing-teaser.jpg","understanding-mortgage-refinancing",[362,365,368,371,374],{"title":363,"content":364},"What does it mean to refinance a mortgage?","Refinancing replaces your current mortgage with a new one. The new loan pays off the remaining balance on your existing mortgage, and you move forward with a new loan.\n\nThe new mortgage loan may change how long the loan lasts, how payments are structured or how the loan is set up overall. While many people explore refinancing to adjust monthly costs, it’s not just a way to cut costs—it’s about reshaping your loan to match your financial and life goals.\n\nSome homeowners choose to explore refinancing with lenders they already trust. Citi, for example, offers mortgage refinancing options across a range of loan types, including conventional refinance loans and government-backed options like FHA and VA refinances, depending on eligibility. These options are designed to support different goals, whether that’s adjusting monthly costs, changing your loan structure or updating a mortgage to better match current plans. \n\nThere’s no single “best” refinance. The right option is the one that best fits your situation, and that\ncan look different from one homeowner to the next.",{"title":366,"content":367},"What are the common types of mortgage refinancing?","Refinancing comes in a few different forms, each designed to support different needs. Understanding the types can help you assess your options as you explore what’s available.\n\n### [Rate-and-term refinance](/refinancing/articles/rate-and-term/)\n\nA rate-and-term refinance lets you change your interest rate, your loan length or both, without\nincreasing how much you owe. \n\nHomeowners often look at this option when they want to: \n\n* Lower their monthly payments by changing the interest rate or extending\n  the loan term \n* Pay off their home sooner by switching to a shorter loan term\n\nWith a rate-and-term refinance, the principal amount you borrowed stays the same— you're just adjusting the interest rate and loan length to better meet your needs.\n\n### [Cash-out refinance](/refinancing/articles/cash-out/)\n\nWith a cash-out refinance, you replace your current mortgage with a new one for a higher amount and take the difference as cash. \n\n A cash-out refinance may help when homeowners want to: \n\n* Pay for home improvements \n* Consolidate existing debt \n* Cover a large, planned expense \n\nBecause you’re borrowing more than you currently owe, lenders look closely at your home equity and\noverall financial picture to be sure the new loan remains manageable. \n\n### Streamline refinances for [FHA](/home-loans/fha-loan/) or [VA loans](/home-loans/va-loan/)\n\nIf you already have an FHA or VA loan, a [streamline refinance](/home-loans/articles/va-irrrl-streamline-refinance/) may offer a simpler path to updating your mortgage.\n\nThese refinances are designed to: \n\n* Require less documentation \n* Allow you to move through the process more quickly \n\n Streamline refinances are ideal for eligible borrowers who are seeking a better rate but don’t want to go through a paperwork-heavy process. \n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" :text='\"\\nThinking about refinancing? Our [Mortgage Refinance Calculator ](/calculators/refinance/)can help you decide if it's worth it.\"'}\n::",{"title":369,"content":370},"How does refinancing a mortgage work?","While refinancing can feel intimidating at first, most homeowners find that the process follows a clear, steady path.\n\n### 1. Review your current mortgage and financial goals \n\nStart by thinking about what you’d like to change. You might be hoping to lower your monthly payment, shorten your loan term, take cash out or simply make sure your mortgage still fits your life today. Having a clear goal may help you focus on the next steps.  \n\n### 2. [Check your credit score and financial position](/home-loans/articles/how-to-buy-a-house-with-bad-credit/) \n\nYour lender will take a look at your overall financial picture, including your credit score, income and existing debts. This helps determine which refinance options may be available and what feels comfortable for your budget. \n\n### 3. Compare refinance options and lenders\n\nDifferent refinance options support different goals. Looking at a few choices side by side can help you see what aligns best with your plans and which options you can comfortably rule out. \n\nSome homeowners start by reviewing options with lenders they already know, looking for [mortgage refinancing](/refinancing/) across conventional and government-backed loan types, depending on eligibility. \n\n### 4. Submit an application and financial documents \n\nOnce you choose a path, you’ll complete an application and share documents such as pay stubs or bank statements. It’s common for lenders to ask follow-up questions—those requests are simply part of the process. Answering in a timely manner may help keep things moving. \n\n### 5. [Get a home appraisal](/home-buying/articles/home-appraisal/) \n\nIn most refinancing cases, you’ll need an appraisal to confirm your home’s current value. This step helps ensure the loan is based on accurate information. \n\n### 6. [Move through underwriting](/home-buying/articles/what-is-mortgage-underwriting/) \n\nUnderwriting is a detailed review of all the information you’ve provided. Requests for clarification are normal and don’t usually indicate a problem—they’re just part of making sure the loan is set up correctly. \n\n### 7. [Review your closing disclosure](/home-buying/articles/closing-disclosure/) \n\nBefore closing, you’ll receive a closing disclosure, a document that outlines the final loan terms and costs. This is your opportunity to review everything carefully and ask questions. \n\n### 8. [Close on your new loan](/home-buying/articles/closing-on-a-house/) \n\nAt closing, the new mortgage replaces the old one. From there, you move forward with your updated loan structure.",{"title":372,"content":373},"What homeowners need to qualify for refinancing","Refinancing looks at many of the same factors as getting a mortgage in the first place. While exact requirements can vary by loan type and lender, these are the areas most homeowners are asked to review: \n\n*  **Credit score:** Many lenders look for a credit score around 620 or higher, though this can vary. Generally, stronger credit opens the door to more options or more favorable terms.\n* **[Debt-to-income ratio (DTI):](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)** This compares your monthly debt payments to your income. A DTI of 43% or lower is often used as a guideline to help ensure the loan feels manageable alongside your other obligations.\n* **Home equity:** The amount of equity you’ve built in your home matters, especially for certain refinance types. Many options look for around 20% equity, though some loan programs allow for less.\n* **Stable income and employment:** Lenders want to see consistent earnings, which show you can comfortably support ongoing mortgage payments over time.\n* **Home value confirmation:** Usually, you’ll need an appraisal to confirm your home’s current value, ensuring the refinance is based on accurate, up-to-date information.\n\nMeeting these guidelines doesn’t guarantee approval, and falling short of one doesn’t automatically rule you out. Think of them as reference points that help lenders determine which refinance options may be a good fit for your situation. \n\n### Costs to expect when refinancing \n\nRefinancing comes with [upfront costs](/refinancing/articles/how-much-does-it-cost-to-refinance-a-mortgage/). Knowing what they are ahead of time can make the process feel more predictable:\n\n* **[Closing costs:](/home-buying/articles/closing-costs/)** Closing costs are the general fees involved in finalizing a refinance. In most cases, they add up to about 2%–6% of the loan amount. Closing costs cover the behind-the-scenes work needed to set up the new loan, from processing paperwork to required third-party services.\n* **[Appraisal fee:](/home-buying/articles/home-appraisal/)** Most refinances include an appraisal to confirm what the home is worth today. This helps make sure the loan is based on an accurate value. Appraisal fees often fall in the $300–$450 range, depending on the property and location.\n* **Title services:** Title fees cover the work of checking that the home’s ownership records are clear and up to date. This step helps prevent surprises down the road and is a routine part of most refinance transactions. Costs vary by state.\n* **Origination charges:** These fees cover the lender’s work to review your application, verify documents and prepare the loan for closing. Origination charges are often around 0.5%–1% of the loan amount, though they can vary.\n* **Prepaid taxes or insurance:** At closing, you may be asked to prepay part of your property taxes or homeowners insurance. This isn’t an added fee—it’s simply collecting amounts that would be due later, often to set up or top off an escrow account. \n\nMany homeowners find it helpful to compare the upfront costs of refinancing with the potential savings over time. This can help you estimate a break-even point: the point at which the money you save begins to outweigh what you paid to refinance. For example, if refinancing costs $6,000 and lowers your monthly payment by $150, it would take about 40 months for the savings to cover the upfront cost.",{"title":375,"hideTitle":32,"content":376},"Mortgage refinancing FAQs","::faq{headline=\"Mortgage refinancing FAQs\" :faqs='[{\"question\":\"How does refinancing a mortgage work from start to finish?\",\"answer\":\"Refinancing a mortgage works by replacing your current home loan with a new one. The new loan pays off the existing balance, and you move forward with updated terms such as a new rate, loan length or structure. There are lots of different options for refinancing available.\"},{\"question\":\"How does refinancing a mortgage work if I already have equity?\",\"answer\":\"When you have equity, refinancing allows lenders to base the new loan on your home’s current value rather than the original purchase price. This equity can support options like adjusting loan terms or, in some cases, accessing cash through a cash-out refinance.\"},{\"question\":\"How does refinancing a mortgage work compared to getting a first mortgage?\",\"answer\":\"The process is similar to getting an initial mortgage. Lenders review your credit, income, debt and home value, and you’ll go through application, underwriting and closing. The main difference is that refinancing replaces an existing loan instead of funding your home purchase.\"},{\"question\":\"How does refinancing a mortgage work once it closes?\",\"answer\":\"After closing, your new mortgage takes over, and your old loan is paid off. You’ll begin making payments based on the new terms, and any previous mortgage obligations end.\"}]'}\n::","2026-06-03T13:33:00.000Z","**Key insights:**\n\n* Mortgage refinancing involves replacing your current mortgage with a new loan with new terms\n* Common options include rate-and-term refinancing, cash-out refinancing and streamline refinancing\n* The process is similar to applying for your first mortgage, but there are some key differences depending on the type of refinance you’re doing \n\nIf you’ve owned your home for a while, it’s natural to check in on whether your [mortgage ](/home-loans/articles/what-is-a-mortgage/)still fits. Life changes,\nincome shifts and priorities evolve, but your loan stays the same unless you decide to update it.\n\nThat's where [mortgage refinancing](/refinancing/) comes in. Homeowners may start looking into it because they want to lower their monthly payments, take advantage of a lower rate, switch [loan types](/home-loans/), take cash out or shorten the life of their loan. In some cases, it's about creating a little more breathing room each month. In others, it's about shaping the mortgage to better support long- term goals.\n\nSo how does refinancing a mortgage work? And what should you expect along the way? This guide walks through how refinancing works, the most common options and the factors lenders review so you can decide whether it’s worth exploring.","Understanding mortgage refinancing: How it works and what to know",[242,339,203],{"to":214,"introText":382,"body":383,"text":213},"Does refinancing fit your plans?","Exploring your options can help you decide whether updating your mortgage makes sense right now.",{"title":385,"description":386},"Understanding Mortgage Refinancing | Mortgage.com","Learn how mortgage refinancing works, common options like rate-and-term or cash-out and what to expect during the process.","content:articles:refinancing:understanding-mortgage-refinancing.json","Understanding Mortgage Refinancing","articles/refinancing/understanding-mortgage-refinancing.json",[254,350,260],1789585205672]