Definition
Refinancing means replacing an existing mortgage with a new loan.
If you are comparing mortgage options, treat refinancing as one piece of the total cost and risk picture, not a standalone detail.
Why It Matters
It matters because a refinance can change rate, term, payment, loan type, or cash-out amount.
Simple Example
A homeowner may refinance from 7.25% to 6.25% if savings justify closing costs.
How to Use This Term
When you see refinancing on a loan estimate, calculator result, or lender conversation, connect it to three practical questions: how it affects monthly payment, how it affects cash needed now, and how it affects flexibility later.