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A mortgage is a method of using property as security for
the payment of a debt. The term mortgage refers to the
legal device used in securing the property, but it is
also commonly used to refer to the debt secured by the
mortgage. In many countries it is normal for home
purchase to be funded by a mortgage. In countries where
the demand for home ownership is highest, strong
domestic markets have developed, notably in the United
States.
Refinancing refers to applying for a secured loan
intended to replace an existing loan secured by the same
assets. The most common consumer refinancing is for a
home mortgage. Refinancing may be undertaken to reduce
interest costs (by refinancing at a lower rate), to pay
off other debts, to reduce one's periodic payment
obligations (sometimes by taking a longer-term loan), to
reduce risk (such as by refinancing from a variable-rate
to a fixed-rate loan), and/or to liquidate some or all
of the equity that has accumulated in real property
during the tenure of ownership. |
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