Refinancing is the process of obtaining a new mortgage loan to replace an existing loan. Most people refinance when they have equity in their home, which is the difference between the amount owed to the mortgage company and the worth of the home. This is typically done to reduce your monthly payments, reduce your interest rate, or swith your mortage repayment type from adjustable rate mortgage (ARM) to a fixed rate mortgage or vice versa. Addiontally, a home owner may need to access extra cash through a cash-out refinance in order to make a large purchase such as a car, fund a home renovation project, or pay off various debts. The refinancing process works much in the same way as when you applied for your first mortgage: you’ll need to research your loan options, collect the right financial documents, and submit a mortgage refinancing application for which will be reviewed for approval.