REFINANCE

Mortgage Refinancing is the process of replacing your existing mortgage with a new one. Homeowners do this to reduce their monthly payments, obtain a lower interest rate, or switch from an adjustable rate mortgage to a fixed rate mortgage.

Borrowers may also want to refinance in order to take out cash for home improvements or to cancel mortgage insurance premiums. Let’s take a look at the different types of mortgage refinancing options available.

Rate-and-term Refinance

This type of mortgage refinance involves renegotiating the loan rate, term, or both. It’s the most common refinance, especially in a falling mortgage rate environment. 

Cash-out Refinance

In a cash-out refinance, homeowners seek to increase the total borrowed amount, typically at least 5% or more of the original loan amount.