Loan Program
Rate and Term Refinance
A rate and term refinance replaces your existing mortgage with a new one to change the interest rate, the loan term, or the loan type, without taking significant cash out. Homeowners across Downriver use it to shorten a 30-year loan, move off an adjustable rate, or remove mortgage insurance once equity has grown.
What it is
- A new mortgage that pays off your existing loan.
- No meaningful cash to the borrower at closing.
- Can change rate, term, loan program, or all three.
Who it's for
- Homeowners whose rate or loan type no longer fits.
- Owners who want to pay the home off sooner.
- FHA borrowers with equity who want to move to conventional and drop mortgage insurance.
Typical requirements
- Sufficient equity based on a current appraisal or approved valuation.
- Qualifying credit and documented income.
- Clear title and current property taxes and insurance.
Guidelines vary by lender and change over time. Meeting these items does not guarantee approval, and all loans are subject to credit and property approval.
Advantages
- Can reduce the monthly payment or total interest paid.
- Can remove mortgage insurance in the right equity position.
- Predictable fixed payments when moving off an adjustable rate.
Trade-offs
- Closing costs apply and must be weighed against the savings.
- Restarting a 30-year term can increase lifetime interest.
FAQ
Rate and Term Refinance: common questions
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