Definition of Refinance:
Refinancing in Orange County:
This is where a borrower in Orange County will pay-off off an existing loan with the proceeds from a new loan, usually (but not always – if they were taking cash out) of the same size, and using the same property as collateral for the loan. In order to decide whether it is worthwhile, the savings in interest must be weighed against the costs associated with refinancing.
The reasons to refinance a mortgage in Orange County include: reducing the term of a longer mortgage (30-year to a 15-year mortgage), or switching between a fixed rate and an adjustable rate mortgage (or vice versa). If there is a prepayment fee attached to the existing first mortgage, refinancing becomes less attractive because of the increased cost to the borrower at the time of the refinancing – the prepayment penalty usually works out to be 6-months of interest on the loan.
Here is a great tool to use to see if it makes sense to refinance your existing mortgage: Should I refinance my Orange County Mortgage?