Rate & Term Refinance
Restructure your existing mortgage to pursue a better rate, a better term, or a more stable payment—without pulling extra cash out.
What a Rate & Term Refinance Does
A rate & term refinance replaces your current mortgage with a new one, but keeps the focus on your existing balance instead of pulling cash out.
The goal is simple: adjust your interest rate, loan term, or loan type to better match your current financial reality. That might mean lowering your payment, paying the home off faster, or moving from an adjustable loan into a long-term fixed option.
Common Reasons Homeowners Refinance
- Reducing the interest rate compared to an older loan
- Shortening the term (for example, 30-year to 20-year or 15-year) to pay the home off faster
- Moving from an adjustable-rate mortgage (ARM) into a fixed-rate loan for stability
- Consolidating a first and second mortgage into one new primary loan
Key Advantages
- Option to pursue lower interest costs compared to your existing loan
- Ability to reset your term to better fit your goals (shorter to attack the balance, or longer to ease the payment)
- Chance to move from an ARM or interest-only setup into a more predictable fixed structure
- Potential to remove certain types of mortgage insurance if equity and loan type allow
Things to Consider Before Refinancing
- Refinancing usually involves closing costs, which can be paid out of pocket or rolled into the new loan in many cases
- Extending your term can lower your payment but may increase total interest over the life of the loan
- Shortening your term can save interest but may raise your monthly payment
- Your current rate, remaining term, and how long you plan to keep the home all matter in the analysis
When does a refinance usually make sense?
It depends. A lower rate alone isn’t enough—you want to look at: your remaining term, how long you’ll keep the home, closing costs, and whether the new structure actually supports your bigger goals. That’s why I always start with a full side-by-side breakdown.
Will my payment always go down?
Not necessarily. If you shorten the term or choose certain loan types, the payment can stay similar or even go up—but your total interest over time may drop. Sometimes the “win” is time and interest saved, not just a lower monthly number.
Can I roll closing costs into the new loan?
In many refinances, yes—subject to guidelines, loan-to-value limits, and overall structure. I’ll show you both options when possible: paying some costs out of pocket versus rolling them in, so the impact is clear.