Rate & Term Refinance Loans PDF Print E-mail

A mortgage broker can restructure your mortgage with lower interest rates, lower monthly payments, and/or reduce the amount of time remaining on your loan. Rate and Term Refinances are used when the borrower doesn't want to pull out any of their equity for cash or debt consolidation, but simply wants to save money with regards to their mortgage.

  • Rate & Term Example:
    If you currently have 20 years left on a 30 year mortgage and your interest rate is fixed at 8.25%. You might want to refinance your remaining balance into a 30 year mortgage with a 6.0%% interest rate. While in this particular case you would be extending the remaining life of the loan, you would be reducing your monthly payments and interest rate rather significantly and save money not only every month, but over the life of the loan.

Rate & Terms aren't just for payment reduction. Sometimes they are used to reduce the period in which you pay off your loan.

  • Term Reduction Example:
    A Borrower is 10 years from retirement, but has 17 years remaining on their mortgage. They may opt to refinance their home to reduce the term to 10 years so that by the time they retire, they own their home free and clear.

The bottom line is, when you want a rate and term refinance, the final outcome will be reducing the amount of interest paid on the loan, and/or reducing the dollar amount that monthly mortgage payment costs.

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