Rate and Term Refinance

A Rate-and-Term Refinance Allows you to replace your current mortgage with one that has a lower rate and/or term.

Credit Score: Borrowers typically need a credit score of at least 620, though higher scores (700+) will help secure better terms and rates.
Income: Lenders will review your income, including documentation such as pay stubs, tax returns, and bank statements, to ensure you can afford the new mortgage payments.
Home Equity: There is typically no requirement for additional equity beyond the current loan balance, but the homeowner must have enough equity in the property to meet lender requirements (often 20% equity).
DTI Ratio: Lenders will usually require a DTI ratio of 43%-50%, depending on the loan amount and the borrower’s financial standing.
Property Type: This type of refinance is available for primary residences, second homes, and sometimes investment properties, depending on the lender.