Editing Refinancing (section)

=== Types of loan refinancing ===
Refinancing can apply to the debt created by several types of loans. They include mortgages, auto loans, [[student loan]]s, credit card balances, personal loans, and other similar types of debt obligations.<ref>{{Cite web|title=4 Types of Loans You Can Refinance|url=https://www.themuse.com/advice/4-types-of-loans-you-can-refinance|access-date=2022-02-24|website=The Muse|date=19 November 2012 |language=en}}</ref>

==== Mortgage refinancing ====
[[Mortgage loan|Mortgage]] refinancing is normally based around the objectives of homeowners and often relates to residential housing loans. The specific types of mortgage refinancing include rate-and-term, cash-out, cash-in, no-closing-cost, and streamline.<ref name=":0">{{Cite web|last=CEPF|first=Laura Grace Tarpley|title=How to choose between the 5 types of mortgage refinance programs|url=https://www.businessinsider.com/personal-finance/types-of-refinance-mortgage|access-date=2022-02-24|website=Business Insider|language=en-US}}</ref> Rate-and-term refinancing is what most people think of when it comes to mortgage refinancing. It includes replacing your original mortgage with a new one, without significant change in the unpaid principal balance. Cash-out refinancing enables homeowners to extract cash out of their home equity value, resulting in an increase in the unpaid principal balance. Cash-in refinancing allows homeowners to pay into their mortgage, resulting in a decrease in the unpaid principal balance to work towards the goal of gaining a better interest rate or lowering monthly payments. No-closing-cost refinancing helps homeowners avoid paying closing costs at closing by adding the closing cost to the unpaid-principal balance and amortizing it over the term of the loan. Streamlined refinancing helps homeowners skip steps in the refinance process such as appraisals and credit history checks but normally is only available for government-backed mortgages.<ref name=":0" /><ref>{{Cite web|title=Types Of Mortgage Refinance: Top 9 Options|url=https://www.rocketmortgage.com/learn/types-of-refinance|access-date=2022-02-24|website=www.rocketmortgage.com|language=en}}</ref>

Refinancing is a major reason for mortgage [[prepayment of loan|prepayment]], which can reduce the realized returns on [[mortgage-backed securities]].

==== Auto loan refinancing ====
[[Auto loan]] refinancing is a way vehicle owners can change the debt obligations attached to their vehicles. The auto loan refinance process is similar to mortgage refinancing where the new debt obligation comes with a new term and interest rate.<ref>{{Cite web|title=Understanding Auto Refinancing|url=https://www.gocaribou.com/kb/understanding-auto-refinancing|access-date=2022-02-24|website=www.gocaribou.com}}</ref> Cash-out refinancing can also apply to car loans if vehicle owners need to use portions of their vehicle equity whereas lease buy-out facility to keep vehicle in possession.<ref>{{Cite web|last=Zimmerman|first=Jackie|title=What To Know About Cash-out Auto Refinancing|url=https://www.lendingtree.com/auto/refinance/cash-out-auto-refinancing/|access-date=2022-02-24|website=LendingTree|language=en-US}}</ref><ref>{{Cite web |date=2020-03-31 |title=What's a Lease Buyout Car Loan? |url=https://www.rategenius.com/lease-buyouts |access-date=2022-07-19 |website=RateGenius |language=en-US}}</ref> Vehicle owners should understand the risks and implications of extending term lengths before refinancing.