Killeen Rate and Term Refinance

Your current mortgage terms might be unfavorable due to high-interest rates and mortgage insurance. But that doesn’t mean you should stick with those arrangements for the rest of the mortgage’s term. 

In mortgages, there’s a practice called refinancing. Under a refinancing agreement, you’re getting a new mortgage to replace an existing mortgage. Many borrowers refinance their mortgages after paying for several years to take advantage of more favorable times. 

At Capital Home Mortgage, we offer rate and term refinance. It’s the most basic refinancing agreement recommended for borrowers looking to lower their interest rate, shorten their loan term, or reduce their monthly payments. Contact our Killeen loan officers to get started with the application.

What is a Rate & Term Refi?

Rate and term refinance is a refinancing agreement that allows borrowers to change the terms of the current mortgage to a favorable term. Under this agreement, you pay off the existing loan with a new one. If the outstanding balance is $300,000, you’ll refinance it by getting a new loan for $300,000. If you’re considering borrowing more than the principal, you should apply for cash-out refinancing. We also offer that product here at Capital Home Mortgage.

Rate and Term Refinance Basics

Rate and term refinancing won’t allow you to borrow money greater than the existing loan’s principal balance. However, you can negotiate the terms of the new mortgage. Most borrowers refinance because they want to lower the loan’s interest rate. Borrowers often get high-interest rates on the first mortgage because of low credit scores or down payment. But as they pay their mortgage on time, borrowers’ credit scores will increase.

Some borrowers refinance because they want to extend the payment term. A longer payment term reduces monthly mortgage payments. You might not mind a longer payment term if you prefer lighter monthly amortizations. Refinancing can help restructure your payment schedules. 

Requirements of Rate and Term Refinance

Requirements differ depending on the product you choose. Rate and term refinancing exists in mortgage products like FHA, VA, and conventional loans. If you decide on VA refinancing, you only need a credit score of at least 580 to qualify. Higher down payment may be required if your credit score is 500. For VA borrowers, the VA refinancing program is made through the Interest Rate Reduction Refinance Loan or IRRRL.

Before you apply for refinancing, you must first secure if you have at least 20% equity in your home. Some lenders may impose higher home equity percentages, but 20% is a minimum benchmark.

Refinance Your Loan with Capital Home Mortgage

Apply for refinancing to get better mortgage terms and lower interest in Killeen. Capital Home Mortgage’s direct mortgage lending program lets us give you the best mortgage deals since we handle your application directly until it gets approved. Be part of the many clients that enjoyed our service today. 

Call us now at (254) 213-7343 to learn more about rate and term refinancing in Killeen.