Refinance Loans
Conventional Refinance
Lower your rate, shorten your term, or switch from adjustable to fixed.
A conventional refinance replaces your current mortgage with a new one — ideally at a better rate, shorter term, or both. It's the most straightforward path to lowering your payment and the default starting point for most Washington homeowners with decent credit and equity.
Key Features
- • Rate-and-term refinances up to 97% LTV
- • Switch from adjustable to fixed (or vice versa)
- • Shorten your term to 15, 20, or 25 years
- • Drop PMI once you're at 20% equity
- • Closing costs typically 2–3% of loan amount
- • No WA state excise tax on refinances
How it works
You apply for a new mortgage, the lender verifies income/assets/credit and orders an appraisal, and at closing the new loan pays off the old one. Same Fannie Mae / Freddie Mac guidelines as a purchase — DTI generally under 45%, 620+ credit, and reserves depending on the program. The whole process is faster than a purchase because there's no contract negotiation, no seller, and no contingencies — just you and the numbers.
What this looks like in Washington
King, Snohomish, and Pierce county homeowners have benefited from significant appreciation, which means many can refinance to drop PMI, move into a shorter term, or both. The 2025 high-cost conforming limit of $1,209,750 keeps most Puget Sound homeowners in conventional territory rather than jumbo. WA's lack of a refinance excise tax saves real money vs. neighboring states.
Pros
- • Lowest rates available for strong credit
- • PMI can be removed at 20% equity
- • No WA excise tax on refinances
- • Flexible term length
Cons
- • Full appraisal usually required
- • Closing costs of 2–3% of loan amount
- • Stricter DTI than FHA
- • Investment properties capped at 75% LTV
Best for: Homeowners with 20%+ equity, 680+ credit, and a clear goal — lower payment, shorter term, drop PMI, or all three.
Common Questions
Related Loan Types
Popular WA markets for Conventional Refinance
Refinancing into conventional terms is common across every WA metro.