Getting a new mortgage to replace the original is called refinancing. Refinancing is usually done to allow a borrower to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created
An ARM adjustment is a change to an interest rate per the terms of the mortgage, but without replacing the mortgage or being considered "refinanced".
In other words:
- The original mortgage could go through many ARM adjustments and not be considered refinanced
- A loan that replaces an existing one is considered refinanced, regardless of whether ARM adjustments have taken place.
