How does mortgage refinancing work?

When you refinance, you apply for a new loan that pays off your existing mortgage. The new loan has its own rate, term, and fees. You may refinance to get a lower rate, shorten the term, change loan type, or tap equity.

The process is similar to a purchase: you apply, provide documents, go through underwriting, and close. You’ll receive a Loan Estimate and later a Closing Disclosure. Getting quotes from multiple lenders lets you compare rate, APR, and closing costs.

Compare refinance offers for the same scenario (e.g. same loan amount and term). Closing costs on a refinance can be significant; lender credits or a slightly higher rate may reduce them. Use a comparison tool to see how each offer stacks up.

Organizing and comparing your refinance quotes in one place helps you decide whether to refinance and with which lender.