Loan Purpose: Rate Term Refinance
Are you thinking about refinancing your home mortgage in the Dallas, Texas area? Refinancing your mortgage allows you to lower the current rate, term, or monthly payment. A Rate Term Refi has the goal of replacing a home owner’s current mortgage with a better mortgage. The rate and term refinance are designed to lower the interest rate or the term of the existing loan, or both.
If you want to refinance your existing mortgage with a lower rate but at the same term results in a lower monthly payment. Refinancing your mortgage at a shorter-term may sometimes lead to a higher payment. The advantage of rate term refi is equity building. Reducing the term of the loan pays off the mortgage in a short period of time which allows you to build equity faster.
The process of paying off one loan with the proceeds from a new loan, using the same property as security. Cash received by the borrower at closing may not exceed $2,000 (not allowed in Texas). Status varies depending upon State Law. The purpose is, as the name implies, to reduce the interest rate, payment, and/or overall term of the mortgage.
Advantages:
- Lower your monthly payment
- Limit of $2,000 cash (varies depending upon Texas State Law)
- Reduce the amount of interest you pay over the long term.
- Build equity in your home and pay it off faster.
- Change the type of loan you have. For example, change your mortgage from an adjustable-rate to a fixed-rate mortgage loan or an FHA to a conventional mortgage.
- Eliminate the need for mortgage insurance.
