Rate & Term Refinance
Rate & Term Refinance is a mortgage refinancing option allowing homeowners to adjust the interest rate and term of their existing mortgage. It's an excellent way to reduce monthly payments or shorten the loan term.
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Benefits
- Lower monthly payments with reduced interest rates.
- Shorten the mortgage term.
- Convert from an adjustable-rate to a fixed-rate mortgage
- Streamline the refinancing process.
Eligibility/Requirements
- Good credit score (exact score depends on the lender).
- Stable employment and income.
- Home equity (the more, the better).
- DTI ratio within lender’s guidelines.
Here’s an example
Sarah and Mike decide to refinance their 30-year mortgage to a 15-year term with Hometown Mortgage. They secure a lower interest rate, which not only reduces their monthly payments but also allows them to pay off their home faster.