Refinance Your Mortgage in Just 7 Steps

Ways to Refinance

There are two main ways to refinance a mortgage:

• Rate-and-term financing: Typically, the remaining balance is refinanced for a lower interest rate or a shorter loan term, such as going from a 30-year loan to a 15-year to save money and build equity faster.
• Cash-out refinancing: The homeowner borrows against his equity and takes out a new mortgage for more than what is owed, then gets the difference in cash or uses it to pay higher-rate debts, such as credit cards.

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