Refinancing refers to the replacement of an existing debt obligation with another debt obligation under different terms.
A loan or debt might be refinanced for many reasons.
1. To take advantage of a better interest rate (a reduced monthly payment or a reduced term)
2. To consolidate other debts into one loan (a potentially longer/shorter term contingent on interest rate differential and fees)
3. To reduce the monthly repayment amount (often for a longer term, contingent on interest rate differential and fees)
4. To reduce or alter risk (e.g. switching from a variable-rate to a fixed-rate loan)
5. To free up cash (often for a longer term, contingent on interest rate differential and fees)
A common form of refinancing is mortgage refinancing which you have to own a property to qualify for a mortgage refinancing.
If you are interested in refinancing your mortgage please click here.