What is Mortgage Refinancing?

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Mortgage refinancing is any mortgage activity, usually when a home owner takes out a second mortgage for repairs, to pay for large bills or to consolidate debts. Understand when to refinance a mortgage with advice from an experienced mortgage broker in this free video on personal finance.

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Video Transcript

Hi, this is Matt McKillen with Innovative Financial Group. I had a question posed to me today, "what is mortgage refinancing?" There's two types of loans that you can get when you're involving your property. One is a purchase loan, obviously that's a loan that you take to buy your home in the beginning. A mortgage refinance is basically the same process is that, it's just that what you're doing is you're either paying the old loan off because you may be borrowing additional money over and above, or you may even be borrowing money to do improvements on the property, or you may be taking a second mortgage out to do improvements on the property or consolidate debts. Anytime you do any mortgage activity on the house, aside from when you bought your property, it's considered a mortgage refinance. So to set the record straight, the loan that you take out when you buy your home, is called a purchase loan. Any type of financing that you do after you've purchased your home, whether it be a new first mortgage or taking a second mortgage or home equity line, that is considered mortgage refinancing. Thanks for asking the question, my name is Matt McKillen with Innovative Financial Group.

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