Rate-and-Term Refinance

A rate and term refinance in Florida replaces your loan with a better one and takes no cash out, which keeps the costs lower than any other refinance.

What a rate and term refinance in Florida does

• Lowers your interest rate
• Moves you between a 30-year and a 15-year term, in either direction
• Converts an adjustable rate to a fixed one
• Requires an appraisal on most programs
• Takes no cash out, beyond a small incidental amount at closing
• Must deliver a net tangible benefit

Florida taxes make this the cheapest refinance

Here is a saving specific to this state that few borrowers know about, and it favours rate and term over cash out considerably.

Florida charges intangible tax on mortgage debt. On a refinance, that tax applies only to new money, meaning any increase over your existing balance. Because a rate and term refinance does not increase the balance, you generally avoid it entirely. A cash-out refinance pays it on the additional amount.

Documentary stamp tax still applies to the new note. However, combined with the reissue rate on title insurance, which discounts the policy when your existing one is recent enough, a straight rate and term refinance often closes for meaningfully less than borrowers expect. Ask your title company for the reissue rate by name, since it is not always offered without prompting.

Net tangible benefit is a real test

Lenders must show the new loan genuinely helps you, and that is a rule rather than a courtesy. It usually means a lower payment, a lower rate, a shorter term, or moving from an adjustable rate to a fixed one.

Consequently a refinance that lowers your payment only by stretching the term back out to 30 years may satisfy the letter of the test while costing you more overall. Ask for a term matching what remains on your current loan. If you are seven years into a 30-year mortgage, request a 23-year term. You capture the rate improvement without restarting the clock.

Who this suits

• Owners whose current rate sits a point or more above the market
• Borrowers on an adjustable rate who want to fix it before the first adjustment
• Owners shortening to a 15-year term to build equity faster
• FHA borrowers with 20% equity, who can drop mortgage insurance by moving to conventional

That last case is frequently the largest saving available and has nothing to do with the rate. See the refinancing guide for the break-even calculation.

Your homestead exemption is unaffected by a refinance, and your Save Our Homes cap continues undisturbed.

Florida documentary stamp and intangible taxes follow Chapters 199 and 201, Florida Statutes; exemptions on refinances depend on the transaction, so confirm with your closing agent. The CFPB owning a home guide covers comparing refinance offers.