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. Corporate Refinancing

    The process through which a company reorganizes its debt obligations ...
  2. Hope For Homeowners

    A federal aid program aimed at helping homeowners who reside ...
  3. No-Appraisal Refinancing

    A type of mortgage for which the lender does not require an independent, ...
  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. Investing

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

    Whether you should refinance your mortgage or not depends on your savings but for people over the age of 50 there are other specific factors to consider.
  3. Personal Finance

    7 Bad Reasons to Refinance Your Mortgage

    When low mortgage rates are everywhere, it might seem like a good time to refinance. Make sure you are doing it for the right reasons.
  4. Investing

    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.
  5. Personal Finance

    9 Things to Know Before You Refinance Your Mortgage

    Whether or not a mortgage refinance is right for you depends more on individual circumstances than this week's mortgage interest rates.
  6. Personal Finance

    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.
  7. 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, ...
  8. 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.
  9. Personal Finance

    Mortgage Options for Underwater Homeowners

    Find out what options are available when your mortgage is greater than the value of your home.
  10. 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.
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. 3 Tips to Refinance a Mobile Home Loan

    Refinancing a mobile home loan is possible if the borrower meets certain criteria. Here are a handful of useful tips on refinancing ... Read Answer >>
Hot Definitions
  1. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  2. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Zero Day Attack

    Zero Day Attack is an attack that exploits a potentially serious software security weakness that the vendor or developer ...
  6. Effective Tax Rate

    The average rate at which an individual or corporation is taxed. The effective tax rate for individuals is the average rate ...
Trading Center