When refinancing a mortgage, you essentially pay off one mortgage and take out another. Why do that? There are several possible reasons. While most of these may end up benefiting, you have to weigh the costs as well. Generally refinancing will cost about 5% of the mortgage value.

By refinancing you may be able to get a lower interest rate than the previous mortgage thus lowering your monthly mortgage payment. This is usually recommended if the interest rate goes down by 2 percent or more. In other cases you should weigh the numbers to see whether there will be any real benefit.

You may also want to change the time period of the mortgage to one better suited to your present circumstances and present economic conditions. For instance if there is a lower interest rate you can shorten the period with hardly any change in monthly payment.

Exchanging the mortgage from an adjustable rate or ARM mortgage to a fixed rate mortgage, or to do the converse, may also be a motive for refinancing. Benefits will depend on whether interest rates are expected to go up or go down.

Other motives can include getting full access to the equity of the real estate or to consolidation of debts. If you want to finance a big expense it may be beneficial for you to tap the equity by refinancing. Mortgage payments are also tax deductible thus increasing the attractiveness of this method of financing. However be careful, you are basically using debt backed by your home. So make sure that the purchase or expense is really worthwhile.

If your motive is consolidation of debt, basically paying off high interest rate debt such as credit card debt by using lower interest mortgage loan, then make sure that you do not accumulate credit card debt again. Otherwise the point of the whole exercise will be lost.

To conclude, you should have a clear idea about your motives, and cost and benefits, before refining your mortgage.

When we talk about real estate transactions it is important to use right terminology. Here we will examine and explain few basic terms used is residential housing.

Occupation types
Housing tenure or occupation of a house can result from several legal arrangements. These include owner occupation, condominium housing, rented housing, pubic housing, and cooperative housing, among others. The type of occupancy does not depend on the type of house.

House Types
Residential real estate can be classified according to the physical appearance and their connectedness to neighboring real estate.

The term single family detached house is used to describe exactly that, a physically separated house occupied by a family. Duplex is a semi detached house with two homes usually separated by a single connecting wall.

There are several types of houses which are connected to their neighbors. A flat or an apartment is a single unit in a building with multiple housing units usually called an apartment building. When a multiple story building has separate houses in each floor, it is called a multi family house. A row-house or a townhouse, also called a terrace house, has a row of houses with just the connecting wall to separate them. Condominiums, though some times used to describe apartments, is a legal arrangement whereby the housing units in a apartment building or terrace house are owned separately and other common parts of the building and attached property are held collectively.

In addition to the already described permanent homes people also occupy potentially portable homes such as, mobile homes or trailers, house boats, and tents.

Size of a house is measured in several ways. When it is measured in square feet, the size of the living area, without garage and other such areas, are given in USA. In contrast, in Europe the measure includes the whole area enclosed by the walls. Houses are also measured according to the number of bedrooms.