Refinancing a mortgage or "refi" for short, means paying off an existing loan and replacing it with a new one. Borrowers often choose to refinance when the interest-rate environment changes substantially, causing potential savings on debt payments from a new agreement.
Other reasons why borrowers refinance include:
- To shorten/lengthen the term of their mortgage resulting in a higher/lower monthly installment respectively.
- To convert from a floating rate to a fixed-rate mortgage, or vice versa
There are many ways, where a refinancing package can be sold to you by a RM or broker to let you think there is a real saving where there is not. Consider reading our blog to ensure you are not paying more after a refinance.
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