Refinancing
Obtaining a new loan to replace an existing one, often for better terms.
Detailed Description
Refinancing
What is refinancing?
Refinancing is the process of replacing an existing loan with a new one, usually under different terms.
What are the types of refinancing?
The main types include rate-and-term refinancing, cash-out refinancing, streamline refinancing, and no-cost refinancing.
What are the benefits of refinancing?
Benefits include lower monthly payments, access to cash, debt consolidation, and improved loan terms.
What are the potential drawbacks of refinancing?
Drawbacks can include closing costs, longer loan terms, impact on credit score, and increased debt levels.
How does refinancing impact credit scores?
Refinancing can lead to a hard inquiry that temporarily lowers the score, but on-time payments may improve credit history over time.