Refi is a slang term for refinance. Refinance is the replacing of an old loan, with a new loan for various reasons.

People refi, refinance, for many reasons. One of those reasons is to qualify for a lower interest rate and a lower payment. By refinancing, your old mortgage company will be paid off by the new mortgage company. Refinancing is very common and the average American sells or refinances every 4-5 years.

When a home is refinanced, this is the process of paying off one loan with the proceeds from a new loan using the same property as security.

You may also refinance to pay off debt. This is called debt consolidation. Doing this can help you save money every month on your bills by consolidating all of your high interest debt into your lower interest mortgage.

Some homeowners refi with a shorter loan term to pay off the mortgage sooner. Other homeowners refi with a longer loan term to take advantage of the lower monthly payments that come with longer loans.

 

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