Rate And Term Refinance

DEFINITION of 'Rate And Term Refinance'

The refinancing of an existing mortgage for the purpose of changing the interest and/or term of a mortgage without advancing new money on the loan. This differs from a cash-out refinance, in which new money is advanced on the loan. Rate and term refinances can carry lower interest rates than cash-out refinances.

BREAKING DOWN 'Rate And Term Refinance'

Rate and term refinancing activity is driven primarily by a drop in interest rates, while cash-out refinance activity is driven by increasing home values. Because there are pros and cons associated with a rate and term and cash-out refinancing, the borrower must weigh the pros and cons of each before making any final decisions.

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RELATED FAQS
  1. How would child support payment that I receive affect my debt ratio on a refinance?

    My husband is not on the home loan with me, and I am trying to refinance my home.  ... Read Answer >>
  2. When would a corporation want to refinance its debt?

    Favorable market conditions or the strengthening of a company's credit rating may lead to the refinancing of corporate debt. ... Read Answer >>
  3. How does refinancing my mortgage affect my FICO score?

    Learn some of the ways refinancing your mortgage could impact your FICO credit score, especially if you have held your current ... Read Answer >>
  4. Why is there a wide margin in interest and a narrow margin in total amount paid on ...

    I am refinancing my home with payoff amount of $107,000 at current rate of 6.0% to a new loan value of $134,300 at 3.125%. ... Read Answer >>
  5. Will my credit be affected by a refinance on my house?

    Upon closing of a refinance on my home (which I'm getting at almost 2.5% better than my origi... Read Answer >>
  6. What are the best ways to pay off my mortgage quickly?

    Learn how mortgage payments may be reduced and how to save thousands on mortgage loans by lowering the interest and principle ... Read Answer >>
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