Refinancing a home loan refers to the process of replacing an existing mortgage with a new one that has different terms, such as a lower interest rate, payment schedule, or duration of the loan
. Homeowners may choose to refinance to save money on debt payments, access cash from their home's equity, shorten their loan term, or switch from a fixed-rate mortgage to an adjustable-rate mortgage or vice versa
. Refinancing involves a credit evaluation and approval process, which may temporarily lower the borrower's credit score
