Refinancing

When interest rates go down, you may want to refinance your mortgage to get a lower rate.
Though some mortgages do turn out to be the lifetime commitment they seem to be when you're in the middle of a closing, you may choose to refinance, or arrange for a new mortgage at a lower rate or for a different term. With the new money you borrow, you pay off the original mortgage.

Because interest rates change constantly, what seems like a good rate at the time you buy may be much higher than typical rates just a few years later. Refinancing can bring your housing expenses more in line with what other people are paying.

Refinancing doesn't come cheaply, though. You often have to pay up-front fees and closing costs again, even if your mortgage is only a few years old. That's especially true when you switch lenders.