Rate and Term Refinance Loans in Lubbock

Lowering Payments and Strengthening Homeownership

If you’ve owned your home in Lubbock for a few years, you’ve probably considered refinancing. Refinancing isn’t just about getting a lower interest rate; it’s about building financial stability for the long run. Sometimes that means lowering your monthly payment to create more breathing room. Other times, it’s about adjusting your loan term, like switching from a 30-year to a 15-year mortgage to build equity faster.

That kind of refinance is called a Rate and Term Refinance, and it’s one of the most practical ways to improve your mortgage terms without touching your home’s built-up equity.

Rate and Term Refinance Loans in Lubbock meeting with homeowners reviewing mortgage refinance documents.

What Is a Rate and Term Refinance?

A rate and term refinance is straightforward. You replace your existing mortgage with a new one to get a better interest rate, change your loan term, or both. You are not pulling cash out of your home’s equity; you are just adjusting your current loan terms to better fit your financial goals.

The appeal of a rate and term refinance is its simplicity. You can adjust the rate, the term, or both without adding cash-out provisions. In Texas, this matters more than you might think.

Homeowners typically use a rate and term refinance to:

Lower the interest rate and the monthly principal and interest payment

Shorten the loan term, like going from a 30-year to a 15-year loan

Extend the term to lower the monthly payment when life gets tighter

Switch from an adjustable-rate mortgage to a fixed-rate mortgage

Move from FHA to conventional to potentially reduce mortgage insurance costs

Clean up the structure of the loan, especially if the original loan was not ideal

This kind of refinance is often the quiet win. It is not dramatic or flashy, but when it works, it can make your monthly life easier and your long-term costs lighter.

Since you are not pulling equity out, this type of refinance usually offers better rates and fewer restrictions than other options.

In Texas, though, there’s an important distinction homeowners should understand, because not every refinance is treated the same. If you’re taking cash out, that’s often considered a Texas Cash Out Refinance, commonly referred to as a Texas (a)(6) loan, and it comes with its own rules.

The Texas Difference: Understanding Cash-Out Refinances

Under Texas law, there are really only two ways to refinance your primary residence: a rate and term refinance and what’s officially called a Texas Section 50(a)(6) loan, which everyone in the mortgage world just calls a Texas cash-out refinance or an (a)(6) loan.

The name comes directly from the Texas Constitution, Article XVI, Section 50(a)(6). Back in 1997, Texas voters approved a constitutional amendment that, for the first time, allowed homeowners to take out home equity loans and cash-out refinances on their primary residences. Before that, you basically couldn’t borrow against your home equity in Texas except under very limited circumstances.

The amendment created specific subsections outlining how these loans must work. Subsection (a)(6) specifically addresses refinances where you’re taking cash out above your existing loan balance. So when mortgage professionals talk about an (a)(6) loan, they’re literally referencing that constitutional provision.

When Should You Consider a Cash-Out Refinance?

Lubbock has many homeowners who think long-term. People put down roots, build families, and invest in their homes both financially and emotionally. When someone refinances in Lubbock, it is often to make the mortgage feel more stable and less intrusive.

You Want to Eliminate Mortgage Insurance

If you started with an FHA loan and now have stronger credit and more equity, refinancing into a conventional loan may let you remove monthly mortgage insurance. This can be a satisfying upgrade, since it removes a recurring cost that no longer fits your situation.

You Want Predictability

If you have an adjustable rate, the uncertainty can wear on you. Moving to a fixed rate is not always about getting the lowest rate. Sometimes it is about knowing your payment and being able to plan your life around it.

You Want a Payment That Feels More Comfortable

Even a modest drop in rate can make payments more manageable. That matters when you are balancing groceries, insurance, repairs, kids’ activities, and everything else that adds up. Homeowners refinance into a shorter term when income improves or expenses drop. It is an intentional move: more discipline upfront, less interest paid over time, and a clearer finish line.

How to Decide Which Refinance Fits Your Goal

  • If your goal is to reduce the payment, shorten the term, or switch loan types, a rate-and-term refinance is the cleaner option. It is focused on efficiency.
  • If your goal is to fund a major expense, consolidate high-interest debt, or invest in the home, a Texas cash-out refinance might be the right move if the new payment remains comfortable and the long-term cost makes sense.

Frequently Asked Questions

Yes, there are closing costs, but they can often be rolled into the new loan amount, so you don’t need to pay them upfront.

A rate and term refinance changes your interest rate, loan term, or loan type without giving you cash back beyond limited adjustments. A Texas cash-out refinance increases the loan amount and gives you cash at closing, and it follows Texas home equity rules.

Sometimes, yes. If you refinance from FHA to conventional and you meet equity and underwriting guidelines, you may be able to remove mortgage insurance. Conventional private mortgage insurance can often be removed once the conditions are met.

Your savings depend on the difference between your current rate and the new rate, your loan balance, and how long you keep the loan. Even a small rate reduction can add up to significant savings over time or help you pay off your home sooner, depending on the new loan’s structure.

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Apply for a Rate and Term Refinance Loan in Lubbock

Ready to see if a rate and term refinance makes sense for your Lubbock home? An experienced mortgage professional can walk you through the numbers and requirements to give you the clarity you need to decide confidently.

Call (877) 280-4833 today to discuss your refinancing goals. We’ll help you understand the differences, run the numbers, and determine which option aligns best with your financial situation. Let’s find the refinance solution that works for you.