A rate & term refinance is a mortgage refinancing option that allows homeowners to replace their existing mortgage with a new loan, typically to achieve one or both of the following goals:
- Lower Interest Rate: Homeowners often refinance to secure a lower interest rate, which can reduce monthly payments and overall interest costs over the life of the loan.
- Change Loan Terms: This can involve adjusting the length of the loan, such as moving from a 30-year mortgage to a 15-year mortgage, or vice versa. Shorter terms generally have higher monthly payments but lower overall interest costs.
Key Features of Rate-Term Refinancing
- No Cash Out: Unlike cash-out refinancing, a rate-term refinance does not involve taking out additional cash from the equity of your home. The primary focus is on adjusting the interest rate or loan terms.
- Lower Monthly Payments: A lower interest rate can lead to reduced monthly mortgage payments, making it more manageable for homeowners.
- Closing Costs: While there are costs associated with refinancing, these can sometimes be rolled into the new loan or offset by the savings from the lower interest rate.
- Break-Even Point: Homeowners often calculate the break-even point to determine how long it will take to recoup the costs of refinancing through savings on their monthly payments.
Pros:
- Potential for significant savings on interest over the life of the loan.
- Lower monthly payments if secured at a lower rate.
- The ability to change the loan term based on financial goals.
Cons:
- Closing costs can be a barrier to refinancing, depending on how they are handled.
- If not done carefully, the refinance might extend the loan term and increase total interest paid.
- A rate-term refinance can be an effective strategy for homeowners looking to reduce their monthly expenses or adjust their mortgage terms to better fit their financial situation.
VARIOUS REFINANCE OPTIONS
There are a few different reasons you may want to consider refinance options for your mortgage. At Local Lending Oklahoma, our experts are here to help you pursue your goals and the best path to achieve them. We can guide you through the various refinance options you have as a resident of the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK region.
Our local mortgage company has the expertise and experience necessary to refinance mortgages of all types and sizes. We offer cash-out refinancing, which can turn some of your home’s equity into cash, as well as term and rate refinancing. As the name suggests, rate and term refinancing affect the term and rate at which you pay back your mortgage.
No matter what route you want to take, Dean “The Mortgage Machine” Slatev will terminate any problem that stands in the way. Contact our team today to discuss the refinance options we offer to clients throughout the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK area!
Call Today to Discuss Your Refinance Options!
Refinancing your mortgage for a shorter term or lower monthly payments is a fantastic opportunity to feel more in control and at ease with your finances. If you’re curious about the various refinance options available to you, call our mortgage lender today or fill out a free, no-obligation application.
Anyone in the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK area can turn to us for a consultation and begin discussing your refinance options.