Refinancing lets you change your home loan to suit your new circumstances.
When you take out a new loan, you use some or all of the funds to pay out your existing loan. The new loan often comes from a different lender, but many people refinance with the lender they’ve been using for years. If you move to a new lender, that lender will take care of paying out your existing loan.
By refinancing, you can use your mortgage for home improvements, buying a new car or paying off larger credit card balances. Home loan refinancing may be used for different reasons including:
Refinancing is a smart way to manage your money. When you refinance to lower the interest rate you have to pay, you can significantly reduce your monthly mortgage payment as long as you don’t increase your mortgage principal amount (as would occur with a line of credit). Refinancing can save you money and help increase the value of your assets.