REFINANCING CENTER : Rate/Term Refinance

A Rate/Term Refinance allows you to pay off your existing mortgage and include the new closing costs in the new mortgage amount. This type of refinance program can be used to reduce your interest rate, loan term or both.

You can refinance your existing purchase mortgage plus allowable closing costs. No cash to the borrower at closing. 2nd liens that were used to purchase the home can also be included. Rate/Term loans are the most common, and easiest refinance loans since they can usually be done as a streamline refinance.

Either a primary residence or an investment property may be refinanced with a Rate/Term Refinance. Appraisals on investment properties are more expensive since rental comps and an operating income statement will be required. Also, loans over 80% of the value require mortgage insurance. Extra costs for investment properties are based on the loan to value. The interest rate is usually raised to absorb all or most of these extra costs.