How a Rate & Term Refinance Works
A Rate-and-Term Refinance is one of the most popular ways for Kansas City homeowners to improve their existing mortgage without borrowing against their home's equity. Whether you're hoping to lower your monthly payment, secure a lower interest rate, switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan, or pay off your mortgage sooner, this refinance option can help you reach your financial goals.
Every homeowner's situation is different. Our local mortgage advisors will review your current loan, discuss your goals, and help determine whether a rate-and-term refinance is the best solution for your needs.
Is a Rate-and-Term Refinance Right for You?
This refinance program is ideal for homeowners who want to improve their current mortgage without taking cash out of their home's equity.
- Lower your monthly mortgage payment
- Reduce your interest rate
- Switch from an adjustable-rate mortgage to a fixed-rate loan
- Move from a 30-year mortgage to a 15-year mortgage
- Remove private mortgage insurance (PMI), when eligible
Need to access your home's equity instead? Learn more about our Cash-Out Refinance program. If you're still comparing refinance options, visit our Kansas City Mortgage Refinance Guide to compare every refinance solution we offer.
Qualifying for a Rate-and-Term Refinance
Every refinance application is unique, but lenders generally evaluate your credit profile, home equity, income, and overall financial picture. Our loan advisors will help you compare available programs and determine which option offers the greatest long-term benefit.
- Loan Amount: Conventional refinance programs are available up to current conforming loan limits, with jumbo financing available for larger loan amounts.
- Credit Profile: Higher credit scores typically qualify for the most competitive interest rates, although refinance options are available for a wide range of borrowers.
- Home Equity: Homeowners with at least 20% equity may be able to eliminate private mortgage insurance (PMI) through refinancing.
- Income & Employment: Stable income and employment help lenders verify your ability to comfortably repay the new mortgage.
Why Homeowners Choose a Rate-and-Term Refinance
A rate-and-term refinance allows you to replace your existing mortgage with a new loan that better fits your financial goals. Unlike a cash-out refinance, you're not borrowing against your home's equity. Instead, you're improving the terms of your current mortgage to save money, reduce risk, or pay off your home faster.
Lower Your Monthly Payment
If interest rates have improved since you purchased your home, refinancing may reduce your monthly mortgage payment and improve your overall cash flow. Even a modest reduction in your interest rate can add up to significant savings over the life of your loan.
Pay Off Your Mortgage Faster
Many homeowners refinance from a 30-year mortgage into a 20-year or 15-year loan. Although your monthly payment may increase, you'll build equity faster and pay substantially less interest over the life of your mortgage.
Switch to a Fixed-Rate Mortgage
If you currently have an adjustable-rate mortgage (ARM), refinancing into a fixed-rate loan can provide predictable monthly payments and protection from future rate increases.
Compare Your Kansas City Refinance Options
Not every refinance program is designed for the same goal. The table below can help you determine which option may be the best fit for your situation.
| If Your Goal Is... | Recommended Refinance Option |
|---|---|
| Lower your monthly payment | Rate-and-Term Refinance |
| Reduce your interest rate | Rate-and-Term Refinance |
| Pay off your mortgage sooner | Rate-and-Term Refinance |
| Access your home's equity | Cash-Out Refinance |
| Reduce upfront closing costs | No-Cost Refinance |
| Compare every refinance program | Kansas City Mortgage Refinance Guide |
Local Kansas City Refinance Experience
Metropolitan Mortgage has helped homeowners throughout the Kansas City metro refinance with confidence. Whether your property is located in Overland Park, Olathe, Shawnee, Lenexa, Lee's Summit, Liberty, Blue Springs, Independence, or Kansas City, our loan advisors understand the local housing market and work with you to find a refinance solution that fits your goals.
From evaluating your current loan to comparing interest rates and reviewing closing costs, we provide personalized guidance throughout the entire refinance process so you can make an informed decision with confidence.
When Does a Rate-and-Term Refinance Make Sense?
A rate-and-term refinance is worth considering if you expect your monthly savings or long-term interest savings to outweigh your closing costs. Our mortgage advisors can help you calculate your break-even point so you know how long it will take for the refinance to pay for itself.
We'll also compare your current loan with today's available refinance options to help you determine whether refinancing now—or waiting—is the better financial decision.
Frequently Asked Questions About Rate-and-Term Refinancing
Can I refinance without taking cash out?
Yes. A rate-and-term refinance replaces your existing mortgage without borrowing against your home's equity. It's designed for homeowners who want to improve their loan terms, lower their interest rate, reduce their monthly payment, or shorten their repayment period.
When does a rate-and-term refinance make financial sense?
Many homeowners refinance when current mortgage rates are lower than their existing rate, when they want to switch from an adjustable-rate mortgage to a fixed-rate loan, remove private mortgage insurance (PMI), or pay off their mortgage faster. We'll help you calculate your break-even point so you can determine whether refinancing is worthwhile.
Can I shorten my mortgage from 30 years to 15 years?
Absolutely. Many homeowners refinance into a shorter loan term to build equity faster and reduce the total amount of interest paid over the life of their mortgage. While monthly payments may increase, long-term savings can be significant.
Can refinancing help eliminate PMI?
If your home has increased in value or you've paid down enough of your mortgage, refinancing may allow you to eliminate private mortgage insurance. During your consultation, we'll review your current equity position and explain your available options.
What if I'm not sure which refinance program is right for me?
Every homeowner's goals are different. If you're still comparing refinance options, visit our Kansas City Mortgage Refinance Guide to compare all available programs, or speak with one of our local mortgage advisors for personalized recommendations.
Explore Other Kansas City Refinance Options
Every refinance program is designed to accomplish a different financial goal. If a rate-and-term refinance isn't the best fit, explore our other refinance solutions below.
- Kansas City Mortgage Refinance Guide — Compare every refinance option we offer.
- Cash-Out Refinance — Access your home's equity for renovations, debt consolidation, or other major expenses.
- No-Cost Refinance — Reduce or eliminate upfront closing costs.
Ready to Lower Your Mortgage Payment?
Whether you're looking to lower your interest rate, reduce your monthly payment, switch to a fixed-rate mortgage, or pay off your loan sooner, our Kansas City mortgage specialists will help you compare your options and determine whether a rate-and-term refinance is the right fit.
Speak With a Kansas City Refinance SpecialistServing homeowners throughout Kansas City, Overland Park, Olathe, Shawnee, Lenexa, Lee's Summit, Liberty, Blue Springs, Independence, and surrounding communities in Kansas and Missouri.