The two species of refinance
Rate-and-term swaps your loan for one with a better rate, a different term, or both, without taking cash beyond costs. It is the classic "rates dropped" move, and also how homeowners shed FHA mortgage insurance, exit an ARM before adjustment, or shorten a 30-year into a 15.
Cash-out replaces your loan with a larger one and hands you the difference. Homeowners use it to consolidate high-interest debt, fund renovations, buy investment property, or exit trap products like HERO and PACE assessments. When your existing first mortgage carries a great rate worth protecting, a second mortgage often beats a full cash-out; Jackie prices both.
The break-even math (the only formula you need)
Closing costs divided by monthly savings equals your break-even in months. If a refinance costs $6,000 and saves $250 a month, you break even in 24 months; keep the loan longer than that and every month is profit. Under two to three years to break even with a longer expected hold is usually a green light. A refinance that resets you to 30 years while you sprint toward retirement deserves a harder look, and Jackie will say so.