Refinancing

The process of paying off an existing mortgage by taking out a new mortgage.

Paying off one loan by obtaining another; refinancing is generally done to secure better loan terms (like a lower interest rate).

The substitution of an old loan(s) with a new loan(s) either with the same lender or with a different lender. Also, renewing an existing or a maturing loan with the same lender.

A way of obtaining a better interest rate, lower monthly payments, or borrow cash on the equity in a property that has built up on a loan. A second loan is taken out to pay off the first, higher-rate loan.

A way of obtaining a better interest rate, lower monthly payments, or borrow cash on the equity in a property that has built up on a loan. A second loan is taken out to pay off the first, higher-rate loan.

Refinancing is the process of paying off an existing loan by taking a new loan and using the same property as security.

Homeowners may refinance to reduce their mortgage expense if interest rates have dropped, to switch from an adjustable to a fixed rate loan if rates are rising, or to draw on the equity that has built up during a period of rising home prices.

Closing costs for a refinance are generally comparable to those for any mortgage. If you're refinancing to reduce your payments, you'll want to calculate how long it will take before you recover the closing costs and begin to save money.

If you're planning to move within a few years, refinancing may not actually save you enough to justify the closing expenses. And if you refinance to use some of your home equity, you run the added risk that prices could drop and you could end up owing more on your mortgage than you could realize from selling your home.

The process of paying off an existing mortgage by taking out a new mortgage.

Refinancing is any dwelling-secured loan that replaces and satisfies another dwelling-secured loan to the same borrower. The purpose of the loan being refinanced is not relevant to determining whether the new loan is a refinancing for HMDA purposes. Nor is the borrower's intended use of any additional cash borrowed relevant to determining whether the loan is a refinancing, though the borrower's intended use of the funds could make the transaction a home improvement loan or a home purchase loan. See the definitions of "home purchase loan" and "home improvement loan." Also see the rule on multipurpose loans on page 12 of the HMDA guide (http://www.ffiec.gov/hmda/guide.htm).