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Refinancing is the process of taking out a new loan in order to pay off one or several existing loans and debts. Loan modification is a change to a single loan, often to make repayments more affordable.

Depending on the details of a loan modification it may be treated as a continuation of the original loan or as a new loan. If it is treated as a new loan, it is a refinance as well as a loan modification.

However, most refinances are done for other reasons. One important one is debt consolidation, where several loans or outstanding debts (credit cards etc) are consolidated into a single loan. Another is to secure a better interest rate - for instance, if the original loan was a low-doc or no-doc loan and the borrower now qualifies for a full-doc loan with a lower interest rate; or if a fixed-rate loan is about to reach the end of the fixed-rate period and convert to the standard variable rate, refinancing to a basic variable loan may be useful.

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13y ago

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Related Questions

What are the options for refinancing with only one spouse?

When refinancing with only one spouse, the options include applying for a new loan in the name of the spouse who has sufficient income and credit, or removing the other spouse from the current loan through a process called a loan assumption or a loan modification.


Can you borrow more on an existing loan?

Yes, it is possible to borrow more on an existing loan through a process called loan refinancing or loan modification, depending on the terms of the original loan and the lender's policies.


What is another term for refinancing a car loan?

Another term for refinancing a car loan is "auto loan refinancing."


What is the difference between refinancing and a second mortgage?

Refinancing is re-assessing the terms of your current mortgage. You are capable of refinancing any loan at any time whether it is a home, auto or personal loan. A second mortgage is a mortgage in addition to your primary note. If you obtain a second mortgage you will be liable to pay two monthly mortgage payments.


Where can you go for online loan refinancing?

There are lots of online resources for loan refinancing. The most famous are e-Loan and Lending Tree. Just google for 'online loan refinancing'.


How can I reduce my mortgage payments?

You can reduce your mortgage payments by refinancing your loan to get a lower interest rate, extending the loan term, making extra payments to reduce the principal, or negotiating with your lender for a modification.


Can title insurance be transferred when refinancing a mortgage?

Typically, a Loan/Mortgage policy cannot be transferred to a new loan as the title coverage is unique to each loan. The mortgage coverage on a loan ends when the loan is paid off and satisfied, that is why new coverage is taken out on the new loan. However, in the case of a Mortgage Modification of an existing loan, the coverage may be extended to cover the existing loan and the new loan amount of the Modification. There would still be title charges for the changes in the Mortgage Modification coverage in most cases.


What options are available for creating a mortgage repayment plan?

Options for creating a mortgage repayment plan include making extra payments, refinancing the loan, extending the loan term, or seeking assistance through loan modification programs.


What is the difference between a normal calculator and a reinancing calculator?

Refinancing Calculators typically have stripped down functions compared to your standard calculator, as they are strictly for figuring out finance related calculations such as loan interest rates and refinancing fees. In addition, refinancing calculators are typically online as opposed to physical.


i have a modular home inapark which is paid off. to apply for a loan on this home is it refinancing or a home loan?

It is refinancing not a home loan. For more information on refinancing go to web site www.ditech.com


Are you considering refinancing your mortgage?

Are you thinking about refinancing your home loan?


How can I adjust my mortgage payment to be more affordable?

To adjust your mortgage payment to be more affordable, you can consider refinancing your loan to get a lower interest rate, extending the loan term to spread out payments over a longer period, or negotiating with your lender for a loan modification.