1 Primary or first mortgage
The initial loan that enables you to
purchase a property.
Why? To acquire property that you
can’t pay for with cash, or that you
prefer to finance so that you can do
other things with your money.
2 Refinance mortgage
A loan that replaces your existing
mortgage with a new rate and term,
using the same property as security.
Why? To get a more favorable monthly
payment or interest rate, and/or to
obtain a loan with a longer term
3 Cash-out refinance
A loan that allows you to refinance for a
higher dollar amount than your current
loan balance, and take the difference
in cash. Not all lenders offer cash-out
refinance loans, and those that do often
have restrictions as to the amount of
cash-out and the use of the funds.
Why? To turn your equity in a property
into cash that you can use for any
business purpose.
