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What is a Rate & Term Refinance?

A Rate and Term Refinance is a loan that can be used to lower your monthly mortgage payment, lower interest rate or provide you with a shortened term.

Options available 

Conventional – Conventional Loans are the most common loan type in the US.  A Conventional Loans are the most competitively priced loans on the market for well qualified borrowers!  There are also many refinance options available for Conventional Loans that allow borrowers to lower their payment, shorten their term, or take cash out of the home.  All with very competitive pricing!

  • Low rates, low fees, and simple loan terms
  • No PMI when you own more than 20% equity in your home.

FHA – FHA Loans are by far the most helpful program for potential and current American homeowners.  With flexible credit qualifications, and low down payment options, FHA Loans make it possible for many Americans to take part in the American Dream of owning their own home.

  • FHA streamline options available to save money without all the hoops and hurdles
  • No appraisal or credit check needed on a FHA Streamline
  • Great rates and pricing for a variety of qualification ranges.

VA – Here at Handshake Home Loans Inc. we have incredible respect and gratitude for the men and women who served our country. We have listed some of the benefits of a VA loan.

  • VA Streamline Refinance – Imagine saving money and lowering your interest rate without having to go through the hoops and hurdles of income qualification, credit score requirements, or buying an appraisal. VA Streamline Refinance does just that by making it as easy and fluid as possible for veterans to qualify for a lower interest rate without the hassle of a full documentation loan.
  • No Private Mortgage Insurance – VA loans are exempt from PMI requirements regardless of down payment or current equity in the home.
  • Flexible Credit Standards – Borrowers can typically qualify for VA loans with lower credit scores than those needed for other loan programs due to their relaxed credit requirements.

Reasons to do a Rate and Term Refinance

A Rate and Term Refinance is a great option for those who have higher interest rates than what’s available at the moment. Rate and term refinancing offers many benefits for homeowners including: lowering your monthly mortgage payment, shortening your mortgage term or saving money on interest.

Refinancing your mortgage loan to a longer term can help you avoid foreclosure if you’re having trouble making your monthly payments. Keep in mind that refinancing will mean paying more interest over time, so be sure to do the math before committing to this option. Interest rates are currently low enough for many homeowners.

Shortening your term will likely save thousands of dollars in interest payments over time – but it also means a higher monthly payment. It’s important to think through these tradeoffs carefully before deciding what is best for your personal financial situation. We can help by providing an honest assessment of how much money refinancing could save you based on your current situation.

Interest rates are currently lower than they were when you took out your original loan and there are a number of reasons why it can make sense for homeowners to refinance their home loans at this point in the economic cycle. Taking an interest rate that’s even a fraction of a percentage lower on what you owe can help save thousands over the course of your loan.


Your credit score is an essential factor in determining whether or not you qualify for a refinance loan, and what type of interest rate or term you can get. There are also other factors such as debt-to-income ratio and home equity amount that will affect how much money you can borrow when looking at rates and terms.

We hope this post has been helpful in understanding the process of applying for a refinance. If you’re ready to take that next step, we can help! 

Fill out our online form and get connected with one of our mortgage experts today. They would be happy to answer any questions you have about your home loan options or provide more information on how refinancing could benefit you.

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