Loan types
Refinance when the new loan has a job to do.
A rate-and-term refinance replaces your current mortgage. People use it to change the rate, shorten or lengthen the term, or remove a co-borrower when the new loan qualifies.
Who it is for
- Homeowners who want a lower rate or a different payoff date
- Borrowers coming out of an adjustable rate
- Owners who want one clear mortgage and are not pulling cash out
How it usually works
- The useful question is the break-even. Closing costs should be compared with the monthly savings, and with how long you expect to keep the home.
- A refinance still needs an appraisal or another property valuation, plus a full credit and income review.
- Taking cash out is a different loan. That option is on the cash-out page.
What to have ready
- Current mortgage statement
- Homeowners insurance information
- Income documents
- A rough value of the home
Guidelines change, and lenders add their own rules. The description above is a starting point, not a quote and not an approval.