hi,
i am a student of finance (a new one) and i happen to be very confused about the refinance concept.
any pointers here?
i happen to be very confused about the refinance concept
That is a pretty vague question.
It is all about cash flow. For most people their biggest asset is real estate owned. It appreciates at a fairly steady rate. Higher in some markets.
Refinancing, in some cases, is gaining access to the equity (cash) in the real estate so that can be used for other things.
On the other hand, some people refinance to get better terms on their investment. With a better interest rate/term comes better cash flow.
what happens to the real estate against which you refinance?
As the word Re-Finance implys, you replace the current loan with a new loan.
Not sure what you mean by (what happens to the real estate)!!
Nothing!