Refi

Refis are the process of reinstating the subsisting debt obligation into other obligations. This is carried out under different terms and conditions. Refis are usually done on mortgages, when the borrower wants to manage the loans or finds it difficult to pay the money. Refis helps the borrower either to shift the obligations or to extend the time of the payment. There are different types of refis methods,
 No closing cost
 Cash-out 
Rate and Term
         There are five different reasons for refis
• A refi can be done if the borrower needs to get better interest rates. This may either lead to reduced payments or reduced duration.
• A borrower can opt for a refi if he/she wants to incorporate other debts with the existing one. This may extend the duration of payment.
• Refis are also used in reducing the monthly payments, but this will again lengthen the duration.
• A borrower may shift from variable rate payment to fixed rate payment using a refi.
• Refis are also used to free up the money or the cash. But, this is done at the risk of the borrower as this may result in longer terms.

There are various advantages in refis. There is no rush in the payment of money and the interest rates can be easily managed. This also enables the borrower to switch to different payment methods.

Though there are varieties of options in refis, a borrower should never take a refi that has a pre-payment penalty. If the amount that has been consolidated by the borrower is a huge sum, then the rate of interest increases adding up to the debt amount. Extended payment usually means your loan continues for more years.

Refis are mainly used in mortgage loans by the lenders and the borrowers to replace or shift debts.

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