Glossary of Refinance Terms
Bankruptcy
Bankruptcy is a legal declaration of an inability to pay creditors. Both individuals and organizations can file bankruptcy.
Cash-Out Refinancing
Cash-out refinancing allows you to refinance your current mortgage for more than you owe and pocket the extra money that is left over.
Closing Costs
Closing costs are fees paid at the time of a loan purchase. These fees may include a loan origination fee, points, appraisal fees, title search and insurance, attorney fees, a deed recording fee, credit report charges, and other lending fees.
Credit Report
A credit report is a financial document that reports detailed information about an individual’s credit history.
Credit Score
The term credit score is used to describe the three-digit number that appears on credit reports. This number represents an estimate of an individual’s financial creditworthiness.
Home Equity Loan
A home equity loan allows a homeowner to borrow against the equity in their home and provides a lump sum of cash to be used for home improvements, debt consolidation, or however the homeowner sees fit.
Interest-Only Loan
An interest-only loan requires you to pay only the interest, not the principle for a specific period of time.
Interest Rate
An interest rate is a rate that is charged or paid for the use of money.
Mortgage Refinance
A mortgage refinance allows a homeowner to get a new loan to pay off their current mortgage loan.
Principal
Principal is an amount of money that is borrowed. In some cases, principal may refer to the amount of money that is left to pay on a loan.
Refinance
Refinance is a type of loan that is used to pay off another loan. Refinance may also refer to a lengthened term of debt.
Second Mortgage
A second mortgage is a mortgage on real estate that has already been pledged as collateral against another mortgage.
Student Loan
A student loan is a type of loan that is used by a student to pay for education expenses, such as tuition, books, or room and board.