Refinancing is the process of obtaining a new loan to replace an existing loan or lease balance. The most common consumer refinancing is for a home mortgage. Refinancing can be worthwhile, but it does not make a good financial sense for everyone. It becomes worth if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate. When you refinance you can adjust the terms of your loan including monthly payment amounts and the length of the loan. It may be a financially better decision to pay a bit more in interest rather than pay points for a loan with lower interest rate, but his type of situation is particularly available if your credit rating is excellent.
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