Rate-and-Term Mortgage Refinance: Costs, Loan Terms, and Questions to Ask

Last reviewed October 5, 2026. Research completed for Skyline Mortgage’s stale Resource Center article, using opened CFPB and Fannie Mae primary sources rather than search snippets. This article is general education and not a commitment to lend, approval, rate quote, legal advice, tax advice, or individualized financial advice.

Current information to know

The CFPB defines refinancing as taking out a new mortgage to pay off and replace the existing mortgage. Read the applicable official guidance at files.consumerfinance.gov.

• ▸A refinance generally involves many of the same application and closing steps as the original mortgage and usually includes closing costs and fees.
• ▸A Loan Estimate presents the loan features and total dollar costs of a proposed refinance; a Closing Disclosure provides final loan terms, projected monthly payments, fees, and other costs.

How to prepare

• ▸What rate-and-term refinancing means: replacing the existing mortgage with a new one to change rate, term, or other loan terms, generally without making cash-out the central purpose.
• ▸Why a customer might consider it: a different payment structure, a shorter term, or more certainty by moving from an adjustable-rate to a fixed-rate mortgage-without promising a financial result.
• ▸Compare the whole transaction: review interest rate, term, principal-and-interest payment, taxes and insurance, upfront closing costs, prepaid items, and total projected cost.

Use current documents and disclosures

Ask which current product or program applies, what documents are needed, how the lender will evaluate the transaction, and which written disclosures show the actual costs and terms. Compare written information carefully and consult an appropriate professional for legal, tax, or other individualized questions.

Sources

Official sources reviewed: files.consumerfinance.gov, consumerfinance.gov, yourhome.fanniemae.com. Requirements and the facts of an individual transaction can change, so review current program information and written disclosures before relying on this general education.