Rate and Term Refinance

 The Mortgage U! Mortgage Education Made Easy

For all your mortgage needs:
Dave Zwierecki
Phone 888-418-4467

 Home  |  About Us  |  Calculator  |  Contact Us  |  News   |  Blog  |  Sitemap 


Rate and Term Refinance
A rate and term refinance is when a borrower refinances to lower the interest rate and/or term of their current mortgage.

A rate and term refinance would not include a debt consolidation refinance or a cash out refinance.

A rate and term refinance is where a new loan is taken out that has a different interest rate or is for a different length of time. This is very common when there is an adjustable rate mortgage (ARM) that is going to reset to a higher interest rate.

Rate and term refinances can also include paying property taxes that are due without being classified as a cash out transaction.

Usually people do a rate and term refinance because they want to lower their monthly mortgage payments. Having a lower interest rate, and spreading your payments out over a longer period of time, equates to paying less each month.

Most lenders will allow a maximum of $2,000 to the borrower when doing a rate and term refinance. Anything over that $2,000 number, and it is considered a cash-out refinance.

Generally speaking, a rate and term refinance poses less risk to the lender so may be easier to qualify for than a cash out refinance.

Lenders sometimes give borrowers lower rates when they only do rate and term refinance. Cash-out refinances are considered riskier loans so some lenders add onto the base rate to compensate for this risk.

Sometimes it is possible to do a rate and term refinance on your first mortgage and then a cash out loan on the second mortgage. These can be done at the same time. Doing a rate and term refinance on the first will get you a lower rate.

Term selection on a Rate and Term Refinance is an issue primarily on which are available ranging from 10 years to 40 years.

Many times when you here low rates advertised on the radio they are for rate term refinancing and not cash out. A cash out refinance will generally have a rate that is higher then a rate term refinance.


Contact Us
If you have any questions regarding our products, you can contact us by calling or e-mailing us and we'll get back to you as soon as possible. Thanks!

Current Address
City, State, Zip Code
Purchase/Refinance/Debt Consolidation


 Information listed above is to be used for educational purposes only and is not guaranteed

Home | Contact Us | News | About | Sitemap | Bad Credit | Homebuyer | Sitemap3 | Sitemap4 | Sitemap5 | Sitemap6 | Sitemap7 | FS Home Loan | No Money Down | First Security | Blog| Privacy Policy

Copyright 2007 First Security Financial Services, Inc.  All Rights Reserved... First Security Financial Services is a full service mortgage provider offering  mortgage educational tools in addition to hundreds of mortgage programs.                                                                                                                     Loan Officer | Real estate agents - who are they | Super Jumbo Mortgage | 100 Financing | Guaranteed Home Loans | What is Underwriting a Mortgage | Quiken Loan