The Refinancing Process

The refinancing process is similar to the one you followed when you got your first mortgage. In a nutshell, refinancing involves paying off your existing mortgage and taking out a new one. Your new mortgage could be at a more attractive interest rate, for a different term, or an entirely different type of mortgage -- such as refinancing from a fixed-rate to an adjustable-rate mortgage.

If it's been a few years since you got your current mortgage, some of the terminology you'll hear as you consider refinancing may be similar, but other words may be new to you. You may recognize words such as credit report, but phrases like prepayment penalties or discount points may be less familiar.

As you proceed through this section, you can refer to our glossary of mortgage- and lending-related words and phrases at any time. It will help you when you discuss your refinancing options with your new lender, who may be able to offer mortgage products your current lender doesn't provide.