Real Estate Term
Refinancing
Replacing an existing mortgage with a new one, often to get better terms or access equity.
What is Refinancing?
Refinancing is the process of replacing your existing mortgage with a new one, usually to get a lower interest rate, change your term, or access built-up equity. Homeowners refinance to reduce their payment, consolidate higher-interest debt, or fund renovations. Because it involves breaking the current mortgage, it can trigger penalties, so the savings should outweigh the costs.
Frequently asked questions
Related terms
EquityThe difference between a property's market value and the amount owed on the mortgage.MortgageA loan used to purchase real estate, with the property serving as collateral.Interest RateThe percentage charged by a lender for borrowing money, typically expressed as an annual rate.AmortizationThe process of paying off a loan over time through regular payments that cover both principal and interest.
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