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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Refinance


Synonyms:home loan refinance, loan refinance, mortgage refinance
Filed Under: financial-banking, mortgages
Tags: banking, finance, mortgage
 

Definition of refinance

refinance
1. Refinancing is the process of replacing an existing debt with a new and sometimes larger loan that has better interest rates and terms and / or that is amortized over a longer period. Consumers will refinance their existing mortgage in order to reduce high monthly payments or to take advantage of substantial rate drops within the market.

Related Terms and Acronyms:

  • bankruptcy (BK)   A court action under the Federal Bankruptcy Code by which a debtor's debts may be discharged, usually by transferring assets to a trustee, or rescheduled.
  • cash back mortgage   A mortgage that provides the borrower a lump sum cash payment.
  • gross debt service (GDS)   The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income.
      ➥  Used by mortgage lender underwriters to determine one's ability to qualify for a mortgage loan.
  • home equity line of credit (HELOC)   An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
      ➥  Also known as a Home Line of Credit.
  • interest rate differential (IRD)   The penalty one pays for breaking a mortgage.
  • mortgage (mtg)   A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • mortgage acceleration clause   A provision of a loan agreement that lets a lender demand payment of the full balance under specified circumstances, such as sale of the property, default or refinancing. Not commonly used in Canada and/or Canadian lenders.
  • mortgage lender (ML)   A lender that offers mortgages, often through a mortgage broker.
      ➥  Used internally by mortgage brokers and mortgage lenders.
  • mortgage renewal   A renewal as it pertains to the mortgage industry is defined as having an existing mortgage term end and signing a new term to continue.
  • second mortgage   A mortgage which ranks after a first mortgage in priority on a registered land title.

More Related Terms and Acronyms

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