Refinance
Replacing your existing mortgage with a new one — usually for a lower rate or different term.
Common reasons: rates have dropped, your credit improved, or you want to switch from an ARM to a fixed-rate. Refinancing has closing costs (typically 2-5% of loan amount) so calculate the break-even before committing.
Related
- ARM (Adjustable-Rate Mortgage) — A mortgage where the rate can change at fixed intervals.
- Fixed-rate mortgage — A mortgage where the interest rate stays the same for the entire term.