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Refinancing your mortgage can be a great way to save money and improve your personal finances. 

With a refinancing, you replace your current mortgage with a new loan. The refi loan is used to pay off your old mortgage, and then you move forward with the new one. So, if you can refinance to a mortgage with a lower interest rate than your current one, for example, you could come out ahead.

If you think you could benefit from refinancing your mortgage then start by answering a few simple questions here to find out how much you could save. 

How does mortgage refinancing work?

How exactly does mortgage refinancing work? Here, we’ll take a look at the main steps a homeowner would take to refinance a mortgage, along with looking at some of the other key things to know about refinancing.

The five main steps for refinancing include:

  1. Browse refinancing terms
  2. Apply for a mortgage refinance loan
  3. Review loan estimates
  4. Go through the full mortgage approval process
  5. Close on the new loan

1. Browse refinancing terms

The first step in mortgage refinancing is to browse refinancing terms by looking at what different lenders offer for refi rates. If you can find lenders offering much lower interest rates than your current mortgage provider, for example, with comparable durations, then you might be interested in moving forward. That said, specific loan terms can differ based on your situation, so don’t assume that the general numbers you see online will be exactly what you’ll end up paying.

2. Apply for a mortgage refinance loan

After browsing what different lenders offer, you might decide to go through with applying for a mortgage refinance loan, which can include sharing some details about your financial situation and your property details.