Refinancing is the replacement of an existing debt obligation with another debt obligation under different terms and conditions. These terms may vary by state, borrower’s credit rating and the loan program.
If the replacement of debt occurs under financial distress, refinancing might be referred to as debt restructuring.
A loan (debt) might be refinanced for various reasons:
- To take advantage of a better interest rate (a reduced monthly payment or a reduced term).
- To consolidate other debt(s) into one loan (a potentially longer/shorter term contingent on interest rate differential and fees).
- To reduce the monthly repayment amount (for a longer or shorter term).
- To reduce market risk (for example, switching from an adjustable, variable-rate to a fixed-rate loan).
- To draw cash (for home improvement, pay off credit card or automobile debts or finance the cost of college education).
Benefit from a Refinance
- Dropping Private Mortgage Insurance, wich is payable every month but is not a deductible expense.
Be sure to check out our mortgage refinance center to get the information you need so you can make a sound decision for you and your family.
If you are thinking about obtaining Refinance Loans or have additional questions about what loan products you may qualify for, you can reach us here, by phone at (805) 371-0431, or by email at email@example.com