Refinancing is the process of replacing an existing mortgage with a new one. Refinancing is done to give a borrower a better interest rate, more favorable loan terms, or help homeowners tap into the equity of their home. Refinancing can be a safe way for borrowers with good credit to move a variable loan rate to a fixed rate to achieve a more stable, long-term monthly payment. Refinancing can also benefit borrowers with less-than-perfect credit or too much debt under the right circumstances.

Refinancing operates similarly to securing a mortgage to purchase a home. However, you will be free of the hassle of home buying and moving, and there will be less pressure to close on a specific date. Furthermore, you have until midnight of the third business day after your loan closes to cancel the agreement if you change your mind.