To refinance your mortgage means to pay off an existing loan with a new loan. The reasons for refinancing can vary. You may choose to refinance in order to use the cash as a loan or you may want a new mortgage because it has a better interest rate and terms. Most loans can be refinanced, except those that forbid prepayment. The costs of refinancing, as well as the rates available, will vary from lender to lender. All federally insured financial institutions are required to provide you with a good faith estimate of all charges in connection with your financing. It is not unusual for a lender to require an application fee to cover costs, such as a credit report and appraisal. You should thoroughly understand the terms of both your current mortgage and the newer mortgage you are considering. For more information on refinancing, contact a financial or real estate professional.
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