Consumer Comeback Blog

Credit Score Glossary: Refinance

Refinance: Reschedule payments on an installment contract or replacing one loan with another.

Consumers commonly refinance mortgage loans on their homes. The reasons for this vary: to reduce the term of a longer mortgage (paying off a mortgage faster), switching between a fixed rate and an adjustable rate mortgage (to save money) or pay off other loans that have high interest rates.

Before deciding to refinance, consumers should consider the long-term savings of refinancing, costs involved in refinancing, and how long the homeowner intends to stay in the home.