A refinance, or “refi” for short, refers to a process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan on a mortgage or a car loan. Most people refinance to get a lower interest rate and, in turn, save money because of a lower rate. Other reasons are debt consolidation and cash out options.
Types of Refinancing
- Rate-and-term refinancing:
- Cash-out refinancing: to cash immediately while still maintaining ownership of the asset.
- Cash-in refinancing:
- Consolidation refinancing: