Refinancing a Conventional Mortgage in Texas: When and How to Save

Last updated: August 2025

Refinancing your mortgage can be one of the smartest moves you make as a Texas homeowner—if you do it at the right time and with the right plan. It can lower your payment, shorten your term, lock in a stable rate, or help you access the equity you’ve built.

The key is knowing when it makes sense for you and how to navigate Texas’s unique rules so you avoid costly missteps. Here’s a clear, step-by-step guide.

When refinancing a conventional loan in Texas makes sense

Every homeowner’s situation is different, but here are common reasons you might refinance:

• Lower your interest rate – If today’s rates are lower than when you bought your home, refinancing can reduce your monthly payment and total interest paid over time. Even a 0.5% drop could be worth it depending on your loan size.
• Shorten your loan term – Moving from 30 years to 15 years may raise your monthly payment, but you’ll pay off your home faster and save thousands in interest.
• Switch from an ARM to a fixed rate – If you have an adjustable-rate mortgage and want predictable payments, refinancing to a fixed rate locks in stability.
• Tap your home equity – A cash-out refinance can turn a portion of your equity into cash for renovations, debt consolidation, or big expenses.
• Remove PMI – If you’ve built at least 20% equity, refinancing could eliminate private mortgage insurance and lower your monthly payment.

Refinancing also gives you a chance to adjust your loan structure to fit your life—aligning your payoff date with retirement, adjusting payment schedules, or freeing up cash for other goals.

Texas refinance rules: what they mean for you

Texas has some of the strongest homeowner protections in the country, and those protections shape how refinancing works—especially for cash-out loans. Here’s what to know:

• One cash-out refi per year – If you take equity out, you’ll need to wait 12 months before doing it again.
• 80% loan-to-value limit – Your total mortgage balance after a cash-out refinance can’t be more than 80% of your home’s appraised value.
• Closing location rules – If you’re taking cash out, the closing must happen at a title company, attorney’s office, or lender’s office—not at your home.

These rules help protect homeowners from over-borrowing, but they also mean working with a lender who knows Texas refinance law can save you headaches.

At Salute Mortgage, we’ve guided Texas homeowners through these steps many times, keeping both the numbers and the process crystal-clear.

How to time your refinance in today’s market

Ask yourself:

• Are interest rates lower than when I bought my home?
• Has my home value increased enough to remove PMI or access equity?
• Am I planning to stay in the home long enough to recoup closing costs?

Also consider seasonal factors—spring and summer tend to boost home values in Texas, which could improve your appraisal and refinance terms.

Understanding the costs and your break-even point

Refinancing isn’t free, so run the numbers before you commit:

• Typical closing costs in Texas – 2% to 5% of your loan amount (appraisal, underwriting, title, etc.).
• Break-even point – If your refinance saves $200/month and costs $4,000, it takes 20 months to break even.
• Avoid term resets – Restarting a 30-year clock may lower your monthly payment but could increase total interest. A 20- or 15-year refi can keep you on track.

If paying costs up front is tough, ask about rolling them into the loan or using lender credits—just know this may slightly increase your balance.

Step-by-step: How refinancing works

1. Check your credit – A higher credit score can unlock better rates.
2. Gather documents – Recent pay stubs, W-2s, bank statements, and current mortgage info.
3. Compare lenders – Get multiple quotes to see rates, fees, and timelines side-by-side.
4. Apply – Your lender will pull credit and start underwriting.
5. Schedule an appraisal – This confirms your home’s current value.
6. Review your Loan Estimate – Check the rate, fees, and new monthly payment.
7. Close – Sign final documents at an approved location.

From start to finish, most refinances take 30–45 days. Staying responsive to your lender’s requests keeps things moving.

Choosing the right lender

A refinance is about more than just rates—it’s about trust, clarity, and speed. In Texas, local expertise matters.

With Salute Mortgage, you get:

• Straight answers – We’ll walk you through your options in plain English.
• Fast closings – We move quickly so you can start saving sooner.
• No surprises – Clear numbers from start to finish.

We combine the reach of a national lender with the personal touch of a hometown advisor—helping you refinance with confidence.

The bottom line on refinancing in Texas

Refinancing a conventional mortgage in Texas can help you lower costs, remove PMI, or tap equity—but only if the timing and terms are right for you.

Run the numbers, understand Texas’s rules, and work with a lender who puts your goals first.

Ready to see your options? Let’s compare rates, terms, and costs—side by side, in plain language—so you can decide if now’s the right time to refinance.