Rate & Term Refinance Loans In Spokane

A rate and term refinance loan, also called a “no cash-out refinance,” is a form of mortgage refinancing that enables borrowers to modify the interest rate, the term, or both of an existing mortgage without receiving additional funds at the closing. The primary purpose of a rate and term refinance is to modify the loan’s terms to reduce monthly mortgage payments or take advantage of improved interest rates.

When consumers choose a rate and term refinance, they typically do so in response to a decline in current interest rates to lower their monthly mortgage payments. This type of refinancing differs from cash-out refinancing, in which the loan amount increases and the borrower receives additional funds at closing.

Refinancing the mortgage’s interest rate and term can provide several potential advantages, including lower monthly payments, lower long-term interest payments, the chance to build equity in the home more quickly, and the option to switch from an adjustable-rate mortgage to a fixed-rate mortgage. When determining whether a rate and term refinance is suitable, it is essential to consider factors such as closing costs, the break-even point, and the borrower’s long-term financial objectives.

Rate and Term vs. Cash-Out Refi

A rate and term refinance and a cash-out refinance have different goals and outcomes for borrowers.

• Rate and Term Refi

A rate and term refinance involves modifying the interest rate, the term, or both of an existing mortgage without receiving additional closing funds. The primary purpose of a rate and term refinance is to modify the loan’s terms to reduce monthly mortgage payments or to take advantage of improved interest rates. A decline in market interest rates frequently prompts this kind of refinancing. Refinances of rate and term do not typically involve receiving cash at closing, and the loan amount remains the same or may be modified based on the modifications made. This is also known as a “no cash-out refinance.”

• Cash-Out Refi

A cash-out refinance, on the other hand, enables borrowers to access a portion of their home’s equity by refinancing their existing mortgage for a greater amount than is owed. Borrowers receive additional funds at closing a cash-out refinance, which they may use for home improvements, debt consolidation, or other financial necessities. The new loan amount is more significant than the previous mortgage, and the difference between the old and new loan amounts is paid to the borrower in cash. Due to the increased risk for the lender, cash-out refinances typically include additional fees, points, or a higher interest rate. Typically, this form of refinancing is driven by homeowners seeking to access their home equity, often due to rising home values.

In short, a rate and term refinance focuses on changing the loan’s conditions to cut monthly payments or take advantage of lower interest rates without obtaining extra funds. A cash-out refinance, on the other hand, enables borrowers to extract a portion of their home equity by refinancing for a greater loan amount and getting cash at closing for various uses.

Apply for a Rate and Term Refinance in Spokane

There are numerous reasons why Spokane homeowners should consider Capital Home Mortgage for a rate and term refinance loan. Capital Home Mortgage provides homeowners with competitive mortgage rates and loan terms, allowing them to reduce their monthly payments and save money. With our expertise in refinancing, we can assist homeowners in achieving their homeownership objectives by offering customized solutions, such as a reduction in the mortgage term. In addition, we prioritize customer service and understand the unique requirements of homeowners in Spokane. Spokane homeowners who choose Capital Home Mortgage can benefit from our experience, competitive rates, and dedication to customer satisfaction.

Call our Spokane Home Loan Specialists at (253) 528-4417 for your rate and term refinance needs.