Refinancing is the process of replacing an existing mortgage with a new one, typically to secure better loan terms. Homeowners often refinance to obtain a lower interest rate, reduce monthly payments, shorten the loan term, or switch from an adjustable-rate to a fixed-rate mortgage.
Refinancing can also be used to access home equity through a cash-out refinance. While it can lead to long-term savings, refinancing may involve upfront costs such as closing fees and appraisals.
It’s important to evaluate the total cost and potential savings to determine if refinancing is the right financial move based on your current situation and goals.