What is Refinancing: Understanding Real Estate Vocabulary

While refinancing is a term that can be applied to many types of loans, in real estate it generally refers to the mortgage loan. There are many options for refinancing, but the new plan must be approved by the lender. 

Refinancing is a process the homeowner (borrower) may choose to go through to change the interest rate and/or terms of their current mortgage agreement. Usually, the homeowner will do this in favor of dropping interest rates or a higher credit score to get a better deal. 

This is not something that the homebuyer needs to worry about while planning to buy a home, but it’s good to have in the back of your mind for the future if it’s needed.