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Refinance
Refinance is a term used in the banking institution. A refinance takes place when a borrower wants to take out another loan to pay off a current loan, usually with different terms.
The most common refinance is that of a home mortgage. Many home mortgages are taken out as an A.R.M, which is an adjustable rate mortgage. With an adjustable rate mortgage, the interest rate fluctuates along with the current market rate. In other words, when the current market rate goes up, the interest on your loan also goes up whereas if it goes down, so will your interest rates go down.
In some circumstances, this can work to a borrower's advantage. However, when the stock market is shaky, an A.R.M. can put a borrower at a very high disadvantage.
When the current market rate goes up and causes your interest to go up, this often causes your monthly payment to go up. Many borrowers will use this opportunity to refinance their home either at a different lending institution or at the same one but with different terms.
Another type of home mortgage is an amortization that is ballooned. For instance, they interest rate is fixed at a certain percentage and amortized for 20 years, but the loan is ballooned for 3 years. At the end of the 3 years, the loan comes up for renewal so the borrower will have to refinance for another 3 years or whatever length they and the lender agree upon.
Sometimes, the lender and borrower will do what is referred to as a "straight renewal" where the terms such as interest rate and payment amount stay the same, but the loan is just extended for another length of time.
Many times borrowers refinance their home mortgage to consolidate their other debts as part of their loan. It's like a new loan because additional funds are given out, yet the home mortgage part of it is a refinance.
Although home mortgages are the most common type of refinance, they are not the only type of loan that can be refinanced. An auto loan, personal loan or any type of loan can be a refinance.
The reasons may be to add additional funds, to get better interest rate, to switch lending institutions or because the term of the loan is up. When you do refinance any type of loan, always shop around for the best interest rates and terms.
Just because you're getting the loan from your own bank isn't a guarantee that you are getting the rest deal. Banks will often give new customers better rates as a way to draw in new business.
If this happens with you, you may be able to use this as leverage with your bank to be competitive.
Refinance Loans Specific links
Refinance Loans News
Real: FHA streamline refinance gets cheaper - The Republic
Real: FHA streamline refinance gets cheaper The Republic The Federal Housing Administration will reduce mortgage fees significantly for borrowers who qualify for the FHA's streamline refinance program. The lower fees go into effect June 11 and will be available to borrowers who refinance loans that were ... FHA Streamline Refinance Set To Spur Refinance Boom |
Push intensifies to pass home-loan refinancing bill - The Hill (blog)
Push intensifies to pass home-loan refinancing bill The Hill (blog) Several other Senate Democrats are working on legislation that would tackle various barriers to refinancing, including expanding refinancing to allow underwater borrowers whose loans are not government-backed to refinance into new mortgages with the ... Don't HARP on it, refinance program too good to pass up Mortgage Q&A: Borrowers hit by mess others made Real estate industry pushes Senate on refi bill |
Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance - MarketWatch (press release)
 e-wisdom.com | Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance MarketWatch (press release) "Eliminating the refinancing barriers homeowners face with Fannie Mae and Freddie Mac loans will help bring them relief by lowering monthly payments and reducing the risk of default." NAR supports the "Responsible Homeowner Refinancing Act" because it ... Refinancing homeowners overwhelmingly choose fixed loans Freddie Mac: 30-year mortgage rate down a tick at 3.78% BofA May Turn Profit on Mortgage Buybacks, Credit Suisse Says |
Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ... - World Property Channel
 Eastern Morning Herald | Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ... World Property Channel "Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market. As a result, applications for refinance loans have increased for the third straight week and are at the highest level since ... Mortgage comparison-shopping: How to read good faith estimate Today's Mortgage Rates: Bank of America, Chase and Citibank Refinance Rates ... Mortgage Refinance in Today's Real Estate Market |
MBA Weekly Survey: Refinance Applications Increase Because of Record Low ... - LoanSafe
 Eastern Morning Herald | MBA Weekly Survey: Refinance Applications Increase Because of Record Low ... LoanSafe “Mortgage rates again dipped to new record lows in the survey, which spurred more borrowers back into the refinance market. As a result, applications for refinance loans have increased for the third straight week and are at the highest level since ... Refinance your FHA Mortgage regardless of your appraised value or loan amount. Time to Refinance While Mortgage Rates are So Low When Does It Make Sense to Refinance? |