Modified schedule of debt payments including a mortgage. Creditors may want to refinance
one's obligations if he or she cannot satisfy the original payment or if interest rates haven fallen
since a borrower took out the loan. For example, whether refinancing is beneficial depends on the
refinancing costs including closing costs and the time needed to recover those costs through low
mortgage payments. An approximation of the closing costs is using the costs of refinancing (3% to 6%
of the outstanding principal) and multiply it by the amount of the loan.