Oct 26 , 2018
Ways to Refinance
There are two main ways to refinance a mortgage:
- Rate-and-term financing: Typically, the remaining balance is refinanced for a lower interest rate or a shorter loan term, such as going from a 30-year loan to a 15-year to save money and build equity faster.
- Cash-out refinancing: The homeowner borrows against his equity and takes out a new mortgage for more than what is owed, then gets the difference in cash or uses it to pay higher-rate debts, such as credit cards.