Refinancing

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Related to Mortgage refinance: Mortgage rates

Refinancing

An extension and/or increase in amount of existing debt.

Refinance

To repay a loan by taking out another loan. Refinancing can allow one to secure a lower interest rate; for example, one can replace a loan at an 8.5% rate with one at 5.5%. In the case of a balloon loan, refinancing can repay the principal if one does not have sufficient funds to do it; that is, if one has made only interest payments over the life of the loan and has not saved the principal amount when the loan comes due, refinancing can prevent bankruptcy. There are two main drawbacks to refinancing. First, there is no certainty that one will be approved for it. One thus takes a risk every time one decides to make only interest payments on a loan or mortgage. Secondly, refinancing generally resets the repayment period; that is, if one refinances six years into a 10 year loan, the one generally repays the new loan over 10 years instead of the remaining four.

Refinancing.

Refinancing is the process of paying off an existing loan by taking a new loan and using the same property as security.

Homeowners may refinance to reduce their mortgage expense if interest rates have dropped, to switch from an adjustable to a fixed rate loan if rates are rising, or to draw on the equity that has built up during a period of rising home prices.

Closing costs for a refinance are generally comparable to those for any mortgage. If you're refinancing to reduce your payments, you'll want to calculate how long it will take before you recover the closing costs and begin to save money.

If you're planning to move within a few years, refinancing may not actually save you enough to justify the closing expenses. And if you refinance to use some of your home equity, you run the added risk that prices could drop and you could end up owing more on your mortgage than you could realize from selling your home.

References in periodicals archive ?
The central bank of Nigeria has announced a plan to set up a mortgage refinance company (MRC).
The federal government of Pakistan will take a 20 percent stake in the proposed mortgage refinance company which the central bank is setting up to solve the housing problem in the country, Dow Jones has reported citing the bank's governor.
In our third quarter earnings release, we discussed that there would be a challenging transition period over the next few quarters created by a decline in record levels of mortgage refinance activity.
Farrell, "the two to three month lag between the filing of a mortgage refinance application and the actual closing of the mortgage loan means that our portfolio is only now feeling the effects of the peak in the Refinancing Index.
Refinancing your vehicle can be accomplished without the trunk-load of fees typically associated with a home mortgage refinance -- there are no application fees, no down payments, and no closing costs.
Global Banking News-January 9, 2014--Nigeria government to set up new Mortgage refinance company
The Federal Government declared its official acceptance and invoice of a $300 million loan facility from the International Development Association (IDA) of the World Bank, to get started with the Nigeria Mortgage Refinance Corporation (NMRC) due for release this month.
One example is the content about refinance: How to judge if mortgage refinance make sense?
75 million, 10-year first mortgage refinance for luxury garden apartment and townhouse development Wellsbrook in Neptune, NJ.
Jordan Ahli Bank's representative Issa Khoury, on behalf of the General Manager, signed an agreement with Jordan Mortgage Refinance Company represented by its General Manager Ibrahim Al-Thaher under which Jordan Ahli Bank is to handle all the company's bond issuing (private placement) inside Jordan.
From September 2008 to December 2010, mortgage refinance originations increased from $111 billion to $392 billion, while the share of mortgage refinances, as a percent of total originations, increased dramatically from 36.
Teachers Federal Credit Union's successful mortgage refinance business scored the credit union some cable TV face time.