Home Refinance
Rate & Term Refinance
Your mortgage should work as hard as you do. A rate and term refinance can lower your payment, shorten your loan, or both.
Smart Financing. Personal Service.
How It Works
How a Rate and Term Refinance Works
The process is straightforward. We look at your current loan, compare it to what is available today, and help you decide if the numbers make sense to move forward.
1
No Cash Out Involved
A rate and term refinance only changes your rate, your term, or both. Your loan balance stays close to what you currently owe with no equity being pulled out.
2
Break Even Point Matters
Refinancing comes with closing costs. It is important to calculate how long it takes for your monthly savings to cover those costs before deciding to move forward.
3
You Can Switch Loan Types
This is a common way to move from an FHA loan to a conventional loan, from an adjustable rate to a fixed rate, or to shorten your term and pay off your mortgage sooner.
4
Could Eliminate Mortgage Insurance
If your home value has increased and you now have 20% or more in equity, refinancing into a conventional loan can remove your mortgage insurance requirement entirely.
Basic Eligibility Requirements
Credit Score: Meets program minimums
Equity: Sufficient to meet loan to value requirements
Employment: Stable income and employment history
Debt to Income: Within program guidelines
Appraisal: Required in most cases
Property: Primary residence, second home, or investment property
Location: Texas, Florida, Minnesota, or Colorado
Pros and Cons
Is a Rate & Term Refinance Right for You?
Refinancing can save you a significant amount over the life of your loan, but the timing and your specific situation matter. Here is what to consider.
The Advantages
- Can meaningfully reduce your monthly payment if rates have improved.
- Shortening your term builds equity faster and reduces total interest paid.
- Switching from an adjustable rate to a fixed rate adds payment stability.
- May allow you to eliminate mortgage insurance if your equity has grown.
- Consolidates your mortgage into one clean loan without increasing your balance.
The Tradeoffs
- Closing costs apply and need to be weighed against your monthly savings.
- Restarting a 30 year term resets your payoff timeline even if rates improve.
- Requires full underwriting including income verification and an appraisal.
- If you plan to move soon, you may not reach your break even point on the costs.
- A lower rate does not always mean a lower payment if the term changes.
Who It's Best For
Rate & Term Refinance Works Best For...
This is a strong option for homeowners whose financial picture has improved or who bought when rates were higher and want to take advantage of better terms today.
Higher Rate Loan
Borrowers who purchased or last refinanced when rates were higher and want to reduce their payment or total interest cost.
Faster Payoff
Homeowners who want to shorten their loan term and build equity faster without taking on a higher payment they cannot manage.
Rate Stability
Borrowers currently in an adjustable rate mortgage who want the predictability of a fixed rate before their rate adjusts.
Common Questions
Frequently Asked Questions
Straight answers to the questions we hear most often.
What is a rate and term refinance?
It is a refinance that changes your interest rate, your loan term, or both. No cash is taken out. The goal is simply to improve your existing mortgage.
How is this different from a cash out refinance?
A rate and term refinance does not increase your loan balance. You are restructuring what you already owe, not borrowing additional funds against your equity.
When does a rate and term refinance make sense?
It makes sense when rates have dropped since you got your loan, when you want to switch from an adjustable rate to a fixed rate, or when you want to pay off your mortgage sooner by shortening the term.
Will I need a new appraisal?
In most cases yes. A new appraisal confirms your current home value and helps determine what loan options you qualify for.
Can I remove mortgage insurance with a rate and term refinance?
Possibly. If your home value has increased and you now have at least 20% equity, refinancing into a conventional loan can eliminate private mortgage insurance.
Not Sure Where to Start?
Let's Figure It Out Together.
Whether you're ready to apply or just exploring your options, we're here to help. No pressure, no obligation, just honest guidance.