Refinancing

Refinancing pages explain what it means to replace an existing mortgage with a new one. This section is about why borrowers refinance, how the goals differ, and how home equity can be used or preserved in the process.

Start with Refinance for the broad concept. Then compare Rate-and-Term Refinance with Cash-Out Refinance to understand the difference between changing loan terms and pulling equity into cash.

This section also covers decision and structure terms such as No-Closing-Cost Refinance, Break-Even Point, Streamline Refinance, and Cash-In Refinance for borrowers deciding whether a refinance actually makes sense and which type fits their situation.

In this section

• Refinance
  A refinance replaces an existing mortgage with a new loan, usually to change rate, term, payment, or cash access.
• Rate-and-Term Refinance
  A rate-and-term refinance replaces the existing mortgage mainly to change the rate, loan term, or both without a major cash withdrawal.
• Cash-Out Refinance
  A cash-out refinance replaces the existing mortgage and converts part of the borrower's home equity into cash.
• No-Closing-Cost Refinance
  A no-closing-cost refinance is a refinance structure in which upfront costs are reduced or offset rather than paid fully out of pocket at closing.
• Break-Even Point
  Break-even point is the time it takes for refinance savings to recover the upfront cost of the new loan.
• Streamline Refinance
  A streamline refinance is a simplified refinance path available in certain mortgage programs with reduced documentation or underwriting requirements.
• Cash-In Refinance
  A cash-in refinance is a refinance in which the borrower brings money to closing to reduce the loan balance or improve the new loan structure.