Understanding Mortgage Refinancing

Refinancing a mortgage involves paying off the existing mortgage and securing a new loan, ideally at a lower interest rate. This option is especially appealing when rates drop, allowing homeowners to save money over time. The process includes finding a new lender willing to pay off the current mortgage, which can lead to a significant reduction in monthly payments. It's crucial to evaluate whether the savings from refinancing will exceed the costs associated with the process, especially if the homeowner plans to sell the property in the near future.