What is Refi?
Refi is a commonly used term in the mortgage banking industry. Refi is simply short for refinance. A refi constitutes obtaining financing through a new mortgage loan for the purpose of paying off an existing mortgage loan. Though there are numerous ways to proceed with a refi, there are two basic types, and the reasons for refinancing depend on individual financial situations. A straight refi is the most common refinancing situation. A straight refi means a borrower is only refinancing the exact amount he or she owes on an existing mortgage. Often, people do this to change either the terms of their mortgage loan or their interest rate. A refi that carries a lower interest rate than a homeowner’s current interest rate saves the homeowner money over the course of the loan, and sometimes lowers his or her monthly payment. People sometimes proceed with a refi to extend the terms of their loan, which can also lower monthly payments, but this is a situation that should be avoided when possib
