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Archive for the ‘Lowering Your Mortgage Term’ Category

A term reduction loan is a loan in which the balance of years remaining on an existing loan is reduced to a lesser amount of years to start a new loan. If you have a 30 year term for example, you can refinance and lower your term to a 15, 20 or 25 year term. The rates are lower on shorter term loans but because you are paying the balance over a shorter period your payments will usually be higher then they would be on a longer term loan. The benefit of a shorter term loan is that, depending on the loan size, you can save 10’s to 100’s of thousands of dollars on interest over the life of the loan by eliminating 10 to 15 years off of your term. For a more detailed explanation as well as helpful examples to help you decide if a term reduction loan is right for you, see our Lowering my Mortgage Term section.