Refi Bubble

DEFINITION of 'Refi Bubble'

A period during which old debt obligations are being replaced with newer obligations with different terms. A typical refi bubble usually occurs when homeowners refinance their home mortgages because rates have fallen to an attractive level. Lowering interest costs or the interest rate leaves homeowners with more discretionary income.

BREAKING DOWN 'Refi Bubble'

On a personal level, smaller debts, like credit card debts or personal loans, can also be refinanced. A risk of refinancing may include a fee charged by financial institutions for early repayment of a loan, so it is important for those who are considering this option to compare the interest savings versus the fees charged for early payment.

RELATED TERMS
  1. No-Appraisal Refinancing

    A type of mortgage for which the lender does not require an independent, ...
  2. Hope For Homeowners

    A federal aid program aimed at helping homeowners who reside ...
  3. Corporate Refinancing

    The process through which a company reorganizes its debt obligations ...
  4. Financial Obligation Ratio - FOR

    An estimate of the ratio of debt payments to disposable income. ...
  5. Term Payment Plan

    An option for receiving reverse mortgage proceeds that gives ...
  6. Refinance

    1. When a business or person revises a payment schedule for repaying ...
Related Articles
  1. Personal Finance

    When (And When Not) to Refinance Your Mortgage

    There are both good and bad reasons to refinance. Learn more about both here.
  2. Personal Finance

    Should You Refinance Your Home if You're Over 50?

    Whether you should refinance your mortgage depends on your savings but for people over the age of 50 there are other specific factors to consider.
  3. Personal Finance

    When Does It Pay to Refinance Your Mortgage?

    Mortgage interest is among a homeowner’s biggest expenses, so refinancing is a popular way to lower costs, but it doesn’t always make sense.
  4. Markets

    Should You Refinance Your Mortgage When Interest Rates Drop?

    Refinancing is a great way for many homeowners to improve their financial situation - but beware of the downsides.
  5. Retirement

    How Does A Reverse Mortgage Work?

    A homeowner who’s at least 62 years old can use a reverse mortgage to tap into her home’s equity for money. The house serves as the loan’s collateral. The loan is repaid when the homeowner dies, ...
  6. Personal Finance

    Refinancing vs. a Home-Equity Loan: How to Decide

    If you want to pay off debt, make home improvements or just get a better interest rate, you need to know exactly what these terms mean.
  7. Personal Finance

    Insurance Tips For Homeowners

    Use these simple ideas to save money and get better coverage for your house.
  8. Investing

    Using Home Equity Loans For Debt Consolidation

    A home equity loan or line of credit is a convenient way to consolidate debts, cut your interest rate and gain a tax deduction. But there are big risks.
  9. Personal Finance

    6 Questions To Ask Before You Refinance

    Refinancing your mortgage can be a quick way to save on payments, but it's not for everyone.
  10. Personal Finance

    Mortgage Fees That Can Trash Your Refinance Deal

    Before deciding that refinancing your mortgage at a lower interest rate is a good deal, factor all the fees into your calculations.
RELATED FAQS
  1. What are the best ways to pay off my mortgage quickly?

    Learn how mortgage payments may be reduced and how to save thousands on mortgage loans by lowering the interest and principle ... Read Answer >>
  2. Is it a good idea to add a reverse mortgage to your retirement strategy?

    A reverse mortgage can be a great way to increase retirement income. Does it work for everyone? What happens after a homeowner ... Read Answer >>
  3. Which loan should I pay off first?

    I have a $33,000 mortgage at 4.5% interest due in June 2019. I also have $627 in monthly car loan payments for loans that ... Read Answer >>
  4. How do I refinance my home without paying PMI?

    I received one loan of $222,000 and a second of $22,000. I would like to refinance my home, but I do not want to pay PMI. ... Read Answer >>
  5. When would a corporation want to refinance its debt?

    Favorable market conditions or the strengthening of a company's credit rating may lead to the refinancing of corporate debt. ... Read Answer >>
  6. How do I know if I should refinance my mortgage?

    The typical rule of thumb is that if you can reduce your current interest rate by 0.75-1% or higher then it might make sense ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center