Acquiring a replacement mortgage on a property you already own, usually requested by a borrower in order to obtain a lower interest rate, a shorter loan term or cash out
To obtain a new loan to pay off an existing loan; to pay off one loan with the proceeds from another Properties are frequently refinanced when interest rates drop and/or the property has appreciated in value Sometimes, a buyer will purchase a property by way of a contract for deed with the expectation of either selling the property before the balance under the contract for deed becomes due or refinancing at better terms and interest rates than exist at the time the agreement of sale is entered into (See realized capital gains)
Replacing an existing loan with a new loan This may be done to reduce borrowing costs under conditions where the borrower can obtain a new loan at an interest rate below the rate on the existing loan Or it may be done to raise cash, as an alternative to a home equity loan
Obtaining a new mortgage loan with lower interest rate and terms for the purpose of paying off the existing mortgage using the same property as a security
Paying off a loan with loan proceeds from another loan Borrowers will often refinance with a loan that has a lower interest rate and lower payments WHEDA does not provide loans for the purpose of refinancing other loans unless the borrower is applying for a Major Rehabilitation loan, which would provide funds for the payoff of a current mortgage loan and would include additional funds for significant repairs and/or improvements to the property
Obtaining a new mortgage loan on a property already owned Often to replace existing loans on the property or gaining access to existing equity on your home
If a person or a company refinances a debt or if they refinance, they borrow money in order to pay the debt. A loan was arranged to refinance existing debt It can be costly to refinance