refinancing
DefinitionPaying off an existing loan with the proceeds from a new loan, usually of the same size, and using the same property as collateral. In order to decide whether this is worthwhile, the savings in interest must be weighed against the fees associated with refinancing. The difficult part of this calculation is predicting how much the up-front money would be worth when the savings are received. Other reasons to refinance include reducing the term of a longer mortgage, or switching between a fixed-rate and an adjustable-rate mortgage. If there are prepayment fees attached to the existing mortgage, refinancing becomes less favorable because of the increased cost to the borrower at the time of the refinancing.
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refinancing is ...
... part of the Lending & Credit subject.
... part of the Lending & Credit subject.
Related Terms
refund, floating debt, prepayment risk, renegotiable rate, rollover mortgage, wraparound loan, balloon note, combined loan to value ratio, closed period, consolidated mortgage bond
refinancing appears in these other terms
cash-out refinancing
refinancing appears in the definitions of these other terms on BusinessDictionary.com
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