Question by hendrixfanhawaii: What does refinancing a mortgage mean?
Best answer:
Answer by Woody
It simply means getting a new mortgage loan at a lower interest rate to save money on your payments. Your lender has to go thru all the paperwork just as if you were buying a home – credit report, title search, appraisal, etc, etc. The lender charges you for all that stuff, but it pays itself back.
One rule of thumb that I have read is that to refinance if you can reduce your interest rate by one whole point (say, from 6% to 5%)
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