ENTREPRENEURSHIP

Detailed explanation-1: -Refinancing your mortgage basically means that you are trading in your old mortgage for a new one, and possibly a new balance [1]. When you refinance your mortgage, your bank or lender pays off your old mortgage with the new one; this is the reason for the term refinancing.

Detailed explanation-2: -A rate and term refinance, sometimes called a rate and term option or Rato mortgage, is a type of refinancing that allows you to change the terms of your current loan and replace them with terms that are more favorable for you.

Detailed explanation-3: -If the replacement of debt occurs under financial distress, refinancing might be referred to as debt restructuring. A loan (debt) might be refinanced for various reasons: To take advantage of a better interest rate (a reduced monthly payment or a reduced term)

Detailed explanation-4: -Example of Refinancing Because of economic conditions, interest rates drop. The couple reaches out to their bank and is able to refinance their existing mortgage at a new rate of 4%. This allows Jane and John to lock in a new rate for the next 20 years while lowering their regular monthly mortgage payment.