Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many reasons why homeowners refinance to obtain a lower interest rate or to shorten the term of their mortgage.
Mortgage refinancing is the process of negotiating a new mortgage contract while continuing to live in your existing home. Instead of moving, you have a closing with a lender that potentially grants you a lower rate or a longer or shorter term and could give you cash back as credit for the equity you’ve already paid into your former mortgage.
Refinancing your home loan may be very rewarding. In the right circumstances, it could save you interest or time on your loan. It could also give you better features that save you money or otherwise make life easier for you. Refinancing is when you get a new loan from your current or new lender that may improve your financial position. Improvement could be cheaper interest and fees, better repayment terms or better features.