What is a Rate or Term Refinance?

A rate‑and‑term refinance loan is when someone gets a new loan to replace the old one. They aren’t getting extra money—it’s just a swap for better rules.

• You might get a lower interest rate, so your payments cost less.
• Or you might change how long you have to pay it back—a shorter time means faster payoff but per-month payments could be higher; a longer time means smaller payments but more total interest.
  
• Your house loan stays the same size—you’re not borrowing more money for cash.
  

It’s called “rate‑and‑term” because you change how much interest you pay or how long you have to pay it back—or both—without taking extra cash from your home.

Why Do People Refinance?

• To save money each month if interest rates go down.
• To pay off the loan sooner by choosing a shorter time.
• Or to make payments smaller by choosing a longer time