Difference between revisions of "Refinance"
From Open Risk Manual
Wiki admin (talk | contribs) |
Wiki admin (talk | contribs) |
||
Line 1: | Line 1: | ||
== Definition == | == Definition == | ||
− | '''Refinance''' is the process of replacing an existing [[Loan]] with a new loan, where the new loan will be used to pay out (retire) an existing loan, and that loan is not near or in [[Default Event | default]]. | + | '''Refinance''' is the process of replacing an existing [[Loan]] with a new loan, where the new loan will be used to pay out (retire) an existing loan, and that loan is not near or in [[Default Event | default]]. |
− | + | From the perspective of the [[Borrower]] refinancing may be subject to [[Refinancing Risk]] (their ability to refinance in acceptable terms). From the perspective of the [[Lender]], refinancing may constitute [[Prepayment Risk]] | |
− | |||
− | |||
[[Category:Loan Product]] | [[Category:Loan Product]] | ||
+ | [[Category:Prepayment Risk]] |
Revision as of 14:10, 1 December 2022
Definition
Refinance is the process of replacing an existing Loan with a new loan, where the new loan will be used to pay out (retire) an existing loan, and that loan is not near or in default.
From the perspective of the Borrower refinancing may be subject to Refinancing Risk (their ability to refinance in acceptable terms). From the perspective of the Lender, refinancing may constitute Prepayment Risk