Rate and Term Refinance

A rate-and-term refinance changes the interest rate, the term or both the rate and the term of an existing mortgage without advancing any new money. It is also known as a “no cash-out refinance.” Rate-and-term refinancing activity is driven primarily by a drop in market interest rates in order to lower monthly mortgage payments. The potential benefits of rate-and-term refinancing include securing a lower interest rate and a more favorable term on the mortgage; the principal balance remains the same. Such refinancing could lower your monthly payments or potentially set a new schedule to pay off the mortgage more quickly.