Hello everyone! This is Mortgage Loan Officer Mario Cardenas, with Affinity Home Lending in Marietta. I hope everyone is having a wonderful day! The mortgage topic of the day is refinancing and specifically rate and term refinancing. So let’s dive right into it ladies and gentlemen. What exactly does it mean to refinance a mortgage?Simply put, refinancing is when a homeowner gets a new mortgage loan to replace their current loan.Most people refinance to lower their interest rate and reduce their mortgage payments, often saving thousands in mortgage interest.But that’s not the only reason to refinance a mortgage.You can also refinance into a new loan type or a new loan term — which could help you pay off your house early. Or you could refinance to cash out home equity.With today’s low interest rates the most common refinance is a rate and term refinance. A rate-and-term refinance lets homeowners change their existing loan’s mortgage rate, loan term, or both. The loan term is the length of the mortgage. For example, a homeowner may refinance from From a 30-year fixed-rate mortgage with a 5% interest rate to a new 30-year mortgage with a 3% fixed rate. The goal of a rate-and-term refinance loan is to save money. You do this either by getting a lower monthly payment or paying less interest overall because of a lower mortgage rate or a shorter loan term. If you refinance into a shorter loan term, your monthly payments will be higher. That’s because you’re paying off the same amount of money in a shorter amount of time. But, since you’re eliminating years of interest payments, you save more money in the long run. Take note that it generally makes more sense to refinance when your mortgage is newer. Also, you have the option to lower interest rates even lower by utilizing discount points. A good rule of thumb is if you plan on staying in the home for a long duration, then it probably makes sense to investigate capitalizing on discount points. Everyone’s mortgage situation is different so make sure to elaborate your individual need set to your loan officer. As usual, it was a pleasure having the opportunity to explain the mortgage topic of the day. Until next time this is mortgage Mario signing out, stay classy everyone!