Rate-and-Term Refinancing
A rate-and-term refinance pays off the existing balance and closing costs without a meaningful cash disbursement to the borrower.
General potential benefits
- May change the term
- May change the loan type
- Typically simpler than a cash-out refinance
General considerations
- Closing costs still apply
- Restarting the term can increase total interest
Common eligibility factors
- Equity
- Credit and income review
- Appraisal
Possible costs
- Closing costs
- Prepaid escrow items
Questions to ask a mortgage professional
- Which loan programs am I likely to be eligible for, and why?
- What documentation will you need from me, and when?
- How do the estimated closing costs compare between programs?
- How would a change in my down payment affect my monthly payment?
- What would change if my credit profile improves before closing?
Readiness checklist
- Compare a shorter term against a lower payment
- Estimate the break-even point
Frequently asked questions
Estimate a payment for this pathway
Use the calculators to model a payment with your own rate, tax, and insurance assumptions. Nothing you enter is submitted anywhere.
This guide is educational. Eligibility factors described here are common considerations, not universal or guaranteed requirements. Nothing here is a loan offer, an approval, or a rate commitment. A licensed mortgage professional must verify actual terms.