When to Refinance Your SF Mortgage (and How to Shop It)

Refinance when the closing costs pay for themselves well inside the time you expect to keep the loan, and shop it exactly as you shopped the purchase, because the pricing spread between lenders is just as wide and your current servicer is rarely the winner. On a San Francisco-sized balance the math turns on smaller rate moves than the old rules of thumb suggest. Here is the break-even test, the alternatives, the jumbo and condo wrinkles, and the title and tax details.

The break-even math

Three numbers: total closing costs, monthly saving, and how long you will keep the loan.

If you expect to hold the loan five years or more, both columns clear. On a $400,000 loan the same half point saves about $133 a month and takes 68 months to recover, which is why advice to wait for a full point does not fit SF balances.

Two corrections. A new 30-year loan restarts the amortization clock; if you are five years in, compare total interest over your real horizon, ask for a 25-year term, or keep paying the old payment so the extra goes to principal. And count only the costs you actually pay: prepaid interest and the new impound deposit are not costs, since the old impound is refunded and interest is owed either way.

Rate-and-term vs cash-out vs HELOC vs recast

The HELOC case is the SF-specific one. Many owners carry a first mortgage well below current rates; replacing it to fund a $150,000 kitchen is a mistake when a HELOC leaves the first loan alone and prices only the draw. The reverse holds when your first-mortgage rate is above the market.

Jumbo refinances in SF

The 2026 conforming limit for San Francisco County is $1,249,125; above it you are refinancing a jumbo, and the purchase-time differences return:

• Appraisal. A full interior appraisal, sometimes two on larger balances. A low appraisal pushes your loan-to-value and pricing up, so look at recent closed sales in the comps tool before you pay for it.
• Reserves. Jumbo lenders commonly want several months of payments in liquid reserves after closing, more than the agency minimums; retirement accounts usually count at a haircut.
• Relationship pricing. Banks discount jumbo rates for deposits moved to them; compare the all-in rate against a broker's wholesale quote.
• The condo question. A condo refinance triggers a project review. For applications dated August 3, 2026 and later, Fannie Mae retired its Limited Review, so most established projects with more than 10 units need a Full Review of the HOA's budget, reserves, insurance and physical condition unless they qualify for a review waiver, and Fannie Mae will not buy loans in buildings with significant deferred maintenance; jumbo lenders apply similar screens. Start the HOA questionnaire in week one and disclose any pending special assessment or litigation up front.

If your balance has fallen under the conforming limit, a conforming refinance can price better than the jumbo you have.

Removing PMI or recasting instead of refinancing

If you put less than 20% down, you may not need a refinance to cut the payment. Under the Homeowners Protection Act you can request PMI cancellation when the balance is first scheduled to reach 80% of the original value, and the servicer must cancel it automatically at 78% as long as you are current; many servicers will also cancel earlier on a new appraisal once you meet their equity and seasoning rules, so ask in writing. Down payment and PMI covers the mechanics. If the payment is the problem and the rate is fine, a recast beats a refinance: after a bonus or stock vest, the servicer applies the lump sum, re-amortizes over the remaining term and charges a small fee, with no appraisal or closing.

Shopping the refi: three Loan Estimates, no deadline

You are not in contract, so nothing forces you to take the first quote. Pick a day, request Loan Estimates from three lenders for the same loan amount, rate type and lock period, and keep every application inside a two-week window; FICO treats mortgage inquiries within its shopping window as one. Include your current servicer, a mortgage broker who shops wholesale pricing across many lenders, and a bank or credit union, where jumbo relationship pricing lives. Compare the rate, the Section A origination charges, the Section J lender credits and the five-year total, then show the lender you prefer the best competing Section A and ask for a match. Freddie Mac's research found borrowers who apply with multiple lenders save roughly $600 to $1,200 a year on typical loan sizes, and that the spread between lenders roughly doubled when rates rose. Shopping lenders has the full method.

Title and escrow on a refi: ask for the short-term rate

A refinance needs a new lender's title policy and an escrow for the payoff and recording, but no owner's policy, transfer tax or agent, and you choose the company. Ask explicitly for a short-term or reissue rate on the lender's policy, which many California title companies file for property insured within the previous few years and seldom apply unless requested, and for the full fee schedule so you can strike document, courier and duplicate wire fees at signing. Escrow and title in SF explains how filed rates work. On a primary residence you also get a three-business-day right of rescission after signing, so the loan funds on the fourth business day.

Points, lender credits and the no-cost refinance

Points buy a lower rate; lender credits sell you a higher one in exchange for covering costs. The decision is the same break-even calculation, with one tax difference: points paid on a refinance are deducted over the life of the loan rather than in the year paid. A no-closing-cost refinance is simply a large lender credit, right when you expect to refinance again or sell within a few years and wrong over a long hold, where the higher rate costs more than the fees. Ask for the same loan quoted both ways. Rate locks and points covers lock terms, which matter less without a contract deadline but still carry extension fees.

Tax and Prop 13 notes

• Refinancing does not reassess. A refinance is not a change in ownership, so your Prop 13 factored base-year value is untouched. Adding a non-spouse co-borrower to title or deeding the home to an LLC can trigger a partial reassessment; spousal transfers and transfers into your own revocable trust are excluded. Prop 13 and Prop 19 covers the triggers.
• Interest limits still apply. Debt that refinances your original purchase loan keeps its status as acquisition debt up to the old balance, subject to the $750,000 federal limit ($1,000,000 for California). Cash out above that balance is deductible only if used to substantially improve the home. Mortgage interest and SALT runs the numbers.
• Points. Deducted over the loan term on a refinance.

What to shop for right now

The refinance lender is a high-savings item for the same reason the purchase lender was: pricing varies as much between lenders as rates move between months, and three same-day Loan Estimates including your servicer is the standard. Title and escrow is medium: a few hundred dollars from the filed schedule and the short-term rate. Neither pays this site anything; it is paid through the buyer-side commission only if you later buy with one of its agents.