05/09/2024
When you refinance, you are essentially replacing an existing loan with new loan under a new term and interest rate.
While people often opt to refinance to secure a lower interest rate or reduce their monthly payments, there other reasons, too! For instance a homeowner may want to switch from a 30-year to a 15-year loan, eliminate mortgage insurance, or convert an ARM to a fixed-rate loan. Or they might choose a cash-out refinance to access the equity they've built.
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Replacement of an existing debt obligation (such as a home loan) with another debt obligation under a different term and interest rate.