Refinancing a mortgage means replacing your existing mortgage with a new one. I.E., paying off an existing loan and getting a new loan.
Reasons to Refinance
-1- To obtain a lower interest rate
-2- To shorten the term of your mortgage; from 30 year mortgage to 15 years
-3- To convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa;
-4- To use your home equity to finance a major purchase, or to consolidate debt.
-5- To get rid of private mortgage insurance (PMI). Note: some states require lenders to automatically remove PMI after your house equity reaches 80% Loan-to-Value (LTV). Check with your lender.