Refinancing refers to applying for a mortgage loan intended to replace an existing loan secured by the property. Homeowners usually consider refinancing for the purpose of getting a better interest rate, loan term, or to draw cash from the equity.
Cash-out refinance: - a refinance in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any subordinate mortgage liens.
No Cash Out Refinance: - the amount of the new mortgage covers the remaining balance of the first loan, closing costs, any liens and cash no more than 1% of the principal on the new loan.
Rate/Term Refinance: - obtaining a new mortgage for the purpose of lowering the interest rate or amount of time the borrower has to repay the loan.