What is another term for a "no cash-out refinance"?

A "no cash-out refinance" is often referred to as a "rate and term refinance." This type of refinancing allows homeowners to replace their existing mortgage with a new one that potentially has different terms, particularly a lower interest rate or a change in the length of the loan, without taking any cash out against their equity. The borrower is essentially refinancing to obtain better loan terms while keeping the equity they have in the home intact.

This option is beneficial for borrowers looking to reduce their monthly payment or pay off their mortgage faster without the complexity and costs associated with pulling out additional funds. The focus is strictly on the mortgage terms rather than extracting cash, which makes it quite different from other refinancing options where cash is taken out against home equity.

Understanding the terminology surrounding refinancing can help homeowners make informed decisions about their mortgage options and financial strategies.