In one sentence
Replacing an existing loan with a new one, to lower rate, extend term, pull equity, or fund a business plan.
The longer version
Refinancings are their own closings, with fresh diligence, a new appraisal, and a payoff of the existing loan coordinated to the day. Rate and term refinances differ from cash-out refinances in scrutiny and proceeds.
The payoff coordination is the delicate part: the old loan releases as the new one funds, and the closing statement has to tie both sides to the penny.
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