Refinancing

Should You Refinance in 2026? A Comprehensive Guide for Texas Homeowners

January 28, 2026 | 7 min read

As Texas mortgage specialists, we see refinance applications daily. Here is the real story on whether refinancing is right for you.

The Refinancing Landscape in 2026

Current 30-year fixed mortgage rates in Texas average around 6.5%. If you locked in a rate above 7% during 2023 or early 2024, refinancing could lower your monthly payment substantially. However, if your rate is already below 6%, the math may not work in your favor when you factor in closing costs.

The 1% Rule (and When to Break It)

The traditional rule of thumb says refinancing makes sense when you can reduce your rate by at least 1 percentage point. For example, dropping from 7.5% to 6.5% on a $280,000 loan saves approximately $200 per month. Use our refinance calculator to run your specific numbers.

Types of Refinancing

• Rate-and-Term: Lower your rate or change your loan term without taking cash out
• Cash-Out: Tap your home equity for renovations, debt consolidation, or investments
• Streamline (FHA/VA): Simplified process with less documentation for existing FHA or VA borrowers

Costs to Expect

Refinancing in Texas typically costs 2-5% of the loan amount. Common fees include appraisal ($400-$600), title insurance, origination fees, and recording fees. Calculate your break-even point by dividing total closing costs by monthly savings.

Step-by-Step Refinancing Process

1. Check your current rate and compare to market rates
2. Calculate potential savings using our refinance calculator
3. Gather financial documents (pay stubs, tax returns, bank statements)
4. Apply with a lender and lock your rate
5. Home appraisal and underwriting (2-4 weeks)
6. Close on the new loan and start saving