what is the meaning of mortgage refinancing

when you take out a loan on your home that is a mortgage just to pay off another loan against the same property, then such a process is known as refinancing/refinance. the same property is kept as the collateral for the refinance loan.

the process of getting a refinance loan is almost similar to that of taking out a mortgage. and, the costs are almost similar to that of taking a mortgage.

read through our section on refinance to know more on this topic.

thanks,
jerry.

"what is the meaning of mortgage refinancing"

---

One suggestion for you Mario, refinancing is only beneficial when it will help to reduce your interest rate from what it is for your current mortgage and will lead to lesser monthly payments.

Livio

Livio, at what point is it advantageous to refinance? I've heard people say that it's worth it to refinance if you can shave even 1/2 a point off the mortgage rate. True, or should the percentage be higher?

Hi Dick,

I would say it is better to go with the 2% rule which suggests that if you get a 2% reduction in rates then it is beneficial to refinance.

Miller

Thanks, Miller. And thanks for the link, too.