Refinancing a mortgage is when you replace your old mortgage with a new one. The new mortgage has a different interest rate and principal amount. The lender pays off the old mortgage with the new one, leaving you with new mortgage and new monthly payment.

This type of refinance changes your loan’s rate, term, or both. Benefits could include lowering your payment when rates drop, eliminating monthly mortgage insurance, or paying off your mortgage sooner.

This type of mortgage refinancing allows homeowners to access the equity in their home as cash. You can use your cash out on home improvements, debt consolidation, or other financial needs.