MORTGAGE REFINANCE
Refinancing is not only about chasing a lower rate. It is about restructuring a debt you will carry for decades — shortening the term, removing mortgage insurance, consolidating higher-interest balances, or pulling equity out for something that earns its keep.
Straight math on whether it is worth doing at all.
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A refinance costs money to do. It only makes sense when the benefit clears that cost within a timeframe you will actually still own the house.
The classic case. Rule of thumb: a drop of half a point or more is worth running the numbers on. The real test is your break-even point against how long you plan to stay.
Moving from a 30-year to a 15-year can save a very large amount of interest. The payment rises, so we stress-test it against your real budget before recommending it.
If you have an FHA loan, the monthly premium usually lasts the life of the loan. Once you have the equity and the credit, refinancing to conventional is how you get rid of it — often the single largest saving available.
Cash-out for renovations, consolidating high-interest debt, or an investment. Sensible when the new money does something productive, and expensive when it does not.
The honest version of this conversation sometimes ends in “do not refinance.” A lender paid on volume has an obvious incentive not to say that.
The Arrowood Team offers a $5,000 Closing Guarantee. After a fully underwritten pre-approval we can issue a guarantee certificate, and if the loan does not close, Tim pays $1,000 to the borrower and $4,000 to the seller. Eligibility depends on the transaction — ask us whether it applies to yours, or read the full terms on our Closing Guarantee page.
The national average purchase closes in about 45 days. Our process targets 21 to 30, which is often the difference between winning a house and coming second.
We are at 119 Boone Ridge Dr in Johnson City. Tim Arrowood (NMLS #393468) personally works your file — no transferred queues, no loan officer who has moved on by underwriting.
We will tell you your break-even in months and let you decide. If you are moving in two years and the break-even is thirty-eight months, the answer is no and we will say so.
Four structures, four very different purposes.
Change the rate, the term, or both, without taking cash out. Lowest cost and the simplest underwriting. Timing, benefits and strategy.
Replace your mortgage with a larger one and take the difference in cash. Best used for something that builds value. Unlocking home equity in Johnson City.
Roll high-interest balances into the mortgage at a far lower rate. Powerful and genuinely risky — you are converting unsecured debt into debt secured by your house. When it makes sense and when it does not.
If you already hold an FHA or VA loan, the streamline versions typically need no appraisal and minimal documentation. The lowest-friction refinance available. How the FHA streamline works.
Equity position. Homeowners across Johnson City, Kingsport and Bristol who bought before the last few years of appreciation are frequently sitting on more equity than they realise. That changes what is possible — particularly for dropping mortgage insurance.
Appraisals are local. A refinance lives or dies on the appraised value, and comparable sales in Jonesborough do not look like comparable sales in Kingsport. We would rather set a realistic expectation up front than have the number surprise you.
Tennessee and Virginia. Closing costs and title practice differ between the two, which affects your break-even. If you are in Southwest Virginia the math is not identical to the Tennessee side.
Refinancing is a new loan, so it is underwritten like one.
Want the number before you commit to anything? Call (423) 406-1567.
1. How much does my rate need to drop to make refinancing worth it?
Half a percentage point is the usual trigger for running the numbers, but it is not the answer on its own. What matters is your break-even: total closing costs divided by monthly saving. If that lands at twenty months and you are staying seven years, it is clearly worth doing. If it lands at forty months and you are moving in two years, it is not, and we will tell you so.
2. Can I refinance to get rid of FHA mortgage insurance?
Yes, and for a lot of homeowners this is the single largest saving available. On most FHA loans written today the monthly premium lasts the life of the loan. Once you have roughly 20% equity and qualifying credit, refinancing into a conventional loan removes it permanently. That saving alone often justifies the refinance regardless of what the rate does.
3. How much equity do I need?
For a conventional cash-out refinance, generally 20% after the new loan. A rate-and-term refinance can often work with less. FHA streamline and VA IRRRL programs are the most forgiving and frequently need no appraisal at all. Given how much values have moved in the Tri-Cities, plenty of homeowners have more equity than they think.
4. Is a cash-out refinance a good way to pay off credit cards?
It can be, and it can also be a serious mistake. You are trading unsecured debt for debt secured by your home at a much lower rate, which is mathematically attractive. The risk is behavioural: if the balances come back, you now have both the cards and a larger mortgage. We will do the math honestly and raise the question, because it is the part that actually determines the outcome.
5. How long does a refinance take?
Typically 21 to 30 days, with streamline refinances often faster since they skip the appraisal. On a primary residence there is also a mandatory three-day right of rescission after signing before funds disburse.
6. Should I refinance into a 15-year loan?
If the payment fits comfortably, the interest saving is substantial. The trap is stretching to make it work and then having no flexibility when something goes wrong. An alternative worth considering: take the 30-year and pay it like a 15-year voluntarily. You get most of the benefit and keep the option to drop back to the lower payment in a hard month.
Tennessee: Johnson City, Kingsport, Bristol, Jonesborough, Elizabethton, Greeneville, Piney Flats and the surrounding Tri-Cities.
Virginia: Bristol and Southwest Virginia along the I-81 corridor.
Preferred Rate is licensed in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA and WI, and operates under American Pacific Mortgage in NV. The Arrowood Team originates primarily in Tennessee and Southwest Virginia.
119 Boone Ridge Dr, Suite 203
Johnson City, TN 37615
(423) 406-1567
arrowoodteam@preferredrate.com
Fifteen minutes and your current mortgage statement tells you the break-even, the new payment, and whether it is actually worth doing.
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© 2024 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.
Refinancing may result in finance charges that may be higher over the life of the loan. Consult with your loan advisor for details.
Not available in New York. Licensed as Preferred Rate in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in NV. AZ BK 1014819. CA #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 164. Licensed under the Oregon Consumer Finance Act. OK MLO13426.
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THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV
