Refinance

When a borrower takes out a new loan to pay off their existing debt, replacing the terms of the original loan with an updated agreement. Refinancing can involve revising the terms of an existing loan, such as interest rates, payment schedules, or other terms. For example, refinancing can involve obtaining a lower interest rate, shortening the term of a mortgage, or converting from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
Borrowers tend to refinance when interest rates fall. Refinancing can have benefits, such as lowering monthly payments and saving money in the long run. However, it's important to understand that refinancing isn't always a smart financial move and depends on your individual situation.