Accessing your home’s equity: If your home’s value has increased, you can refinance to borrow some of that value (equity) as cash. This is also called a “cash-out refinance.”

 

Change the loan term: You can shorten the term to pay it off faster or lengthen it to lower monthly payments.

 

Refinancing can be a good strategy to reduce your borrowing costs or access cash, but it's important to carefully calculate the associated fees (such as break-the-contract penalties).

 

Get a better interest rate : If interest rates have gone down since you took out your original loan, refinancing may allow you to pay less interest.