The replacement of an existing mortgage with a new mortgage under different terms. The new mortgage pays off the current mortgage and takes the first position lien against the property. Most reasons people those to refinance include reducing their interest rate, switch from a variable rate.
The Real Estate Settlement Procedures Act, a Federal consumer protection statute first enacted in 1974. RESPA was designed to protect home purchasers and owners shopping for settlement services by mandating certain disclosures, and prohibiting referral fees and kickbacks.