When you refinance your mortgage, you get a new loan — with new terms — and pay off the original loan. There are several types of refinance loans from which you can choose. A rate and term refinance, also known as a traditional refinance or no cash-out refinance, allows you to change the interest rate and loan term without changing the principal balance.

Some of the key benefits of a rate & term refinance include:

• Securing a lower mortgage rate
• Changing the loan term
• Switching loan types
• Eliminating mortgage insurance

A cash-out refinance is a mortgage refinancing option that lets you convert home equity into cash. A new mortgage is taken out for more than your previous mortgage balance, and the difference is paid to you in cash.

Key Takeaways:

• In a cash-out refinance, a new mortgage is taken out for more than your previous mortgage balance, and the difference is paid to you in cash.
• You usually pay a higher interest rate or more points on a cash-out refinance mortgage compared to a rate-and-term refinance, in which a mortgage amount stays the same.
• A lender will determine how much cash you can receive with cash-out refinancing, based on standards such as your property’s loan-to-value (LTV) ratio and your credit profile.

Investor refinance is a type of mortgage refinance transaction that is specifically designed for real estate investors. This type of refinance allows investors to access the equity in their property to make additional real estate investments or to fund other business ventures.

Key Takeaways:

• One of the key benefits of investor refinance is that it can provide investors with a source of funding that is separate from their personal finances. 
• This can be especially useful for investors who are looking to grow their business but do not want to dip into their personal savings or take on additional personal debt.