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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.


Shorthand for refinance.

References in periodicals archive ?
when there exists [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] that contains more than one distinct zero of p(z), REFI is able to generate at least one optimal approximation to a zero [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII].
The Refi Plus program allows more efficient, cost-effective refinancing for borrowers," Tom Goric, vice president at Dubuque Bank & Trust, explained.
Although Crigler is taking a wait-and-see attitude toward HARP-driven refis, he could find the purchase market strengthening in 2012.
Two months ago, the couple called back to request another refi to take out cash to again consolidate debts, including a car payment.
For more information on the cash out refi vs heloc debate and to avail on their loan calculators, please visit LoanLove.
The rule of thumb is that homeowners should consider a refi if they can save 1 percentage point and plan on staying in their home for at least five more years.
To be concise, the article goes straight to the point when comparing the benefits and drawbacks of each loan: "The biggest 'pro' in favor of a cash-out refi: Since a refi is a first-position mortgage - that is, it's the primary loan on your home - the interest rates are usually lower.
Near-term inflation looks to have peaked, and looks set to prompt the ECB to cut the refi rate to 1% by January.
Central bank officials have repeatedly said that rates are appropriate for now and in our central scenario we see the refi rate remaining at 1.
At most any other point in history, rates this low would send homes flying off the market and would jam the phone lines with refi requests.
We have institutional buyers looking to make steady cash returns instead of local entrepreneurs able to do a cash out refi in five years or a flip in three.
REFI launched its EPIC awards three years ago to recognize innovators in the market.