Home loan refinancing basically means taking out a completely new loan, with a new term and interest rate to replace your current mortgage. Mortgage refinancing can have an enormous impact on your financial picture.
The primary reason for refinancing a mortgage is to negotiate a loan with a lower monthly payment amount and a lower rate of interest. The refinancing is a great option if the borrower wants to change the type of loan from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
Credit score plays an important role in refinancing. The lender will consider the credit history to determine if the borrower could repay the loan.