Rate and Term Refinance
When an existing home loan is replaced by another (a new home loan), what it means is that the individual got a rate and term refinance. A rate and term refinance is the substitution of an existing home loan with a new home loan. The term implies, a new rate which is typically lower and a fresh term comes with the new home loan serving as a substitute.
In a rate and the term change, the balance on the initial loan stays active and has to be repaid. Let’s take an itemized look at what changes when you opt for a rate and term refinance:
What does not change when you opt for a rate and term refinance is the Loan amount (the cost of your mortgage; this excludes the interest rate).
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NOT A GUARANTEE, OFFER OR AGREEMENT. EVERETT FINANCIAL, INC. D/B/A SUPREME LENDING NMLS ID #2129 (www.nmlsconsumeraccess.org) 14801 Quorum Dr., #300, Willmar, MN 75254. 877-350-5225. © 2017. Information, rates, & programs are subject to change without prior notice. Subject to credit & property approval. Not affiliated with any government agency. Intended for Minnesota Consumers Only. Minnesota- SML Mortgage Banker Registration Residential Mortgage Loan Originator.
Some circumstances lead you right to the doorstep of a rate and term refinance – these circumstances are: