Definition
The process of replacing your current mortgage with a new one, often to secure a lower interest rate or better terms.
What to consider
- Compare offers from multiple lenders to get the best deal.
- Understand the closing costs and fees involved.
- Make sure refinancing fits your long-term financial goals.
Real world scenarios
- Realizing interest rates have dropped, Maria refinances her 30-year mortgage to a lower rate, saving thousands over the loan’s life.
- Damon switches from an adjustable-rate to a fixed-rate mortgage during refinance, locking in predictability for the remaining term.
- Leila’s refinance includes cash out, giving her funds to update her kitchen while still securing a favorable mortgage payment.
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