Finance
A Vermont homeowner who refinances their mortgage primarily to reduce their monthly interest payment is engaging in a:
ACash-out refinance
BRate-and-term refinance✓ Correct
CSecond mortgage
DWraparound mortgage
Explanation
A rate-and-term refinance replaces an existing mortgage with a new one at a lower interest rate and/or different loan term, reducing monthly payments or total interest cost. No cash beyond closing costs is taken out. This differs from a cash-out refinance, which increases the loan balance.
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