Refinancing and Home Equity
Rate-and-term refinance
Short answer
A rate-and-term refinance replaces an existing mortgage primarily to change the interest rate, term, or both, subject to program definitions and limits on cash back.
Detailed explanation
A rate-and-term refinance replaces an existing mortgage primarily to change the interest rate, term, or both, subject to program definitions and limits on cash back.
A refinance or home-equity decision should compare the current obligation with the proposed structure, including costs, term, payment, interest, mortgage insurance, cash received, and how long the financing is expected to remain in place.
What this means for you
Compare the current loan with the proposed loan using payment, term, costs, break-even period, mortgage insurance, and projected interest over the time you expect to keep it.
Important limitations and exceptions
- A lower payment can result from a longer term and does not necessarily mean a lower total cost. Compare both near-term payment effects and projected cost over the period you expect to keep the financing.
- Availability, eligibility, pricing, documentation, and state coverage vary. This article is general education and is not an approval, rate quote, Loan Estimate, commitment to lend, or recommendation for a specific consumer.
Related Imperium resources
A linked program is not a statement that it is suitable, available, or approved for a particular consumer.
Primary references
Educational-information disclaimer
This article provides general mortgage education. It is not legal, tax, investment, or financial-planning advice; an approval or credit decision; a commitment to lend; a rate lock; a Loan Estimate; or a recommendation for your specific circumstances. Consult the appropriate licensed or independent professional for transaction-specific guidance.