Refinance, refinancing refers to the replacement of existing debt with a new debt under new terms. The most common refinancing is for a home mortgage. If the replacement of debt occurs under financial distress, it also referred to as restructuring debt. A loan (home loan debt) can be refinanced for many of reasons:

1. Refinancing to take advantage of a lower interest rate. ( by refinancing it can lower your monthly payment or it can reduce the loan terms).

2. Refinancing to lower your monthly loan payment amount (this will result in longer loan terms)

3. Refinancing to reduce your home loan interest rate or alter the risk (variable rate home loan to a fixed  rate home loan)

4. Refinancing to lower your monthly loan payment amount (this will result in longer loan terms)

5. Refinancing to pull equity out of your home (refinancing to free up cash will result in longer home loan terms)

Refinancing for reasons two, three, and five are usually undertaken by borrowers who are in financial difficulty and need to reduce their monthly repayment obligations (with the unste that they will take longer to pay off their debt. In context of personal finance, refinancing multiple debts makes management of the debt easier. If a high interest debt, such as credit card debt, auto loan debt and or student loan(s) debt is consolidated into a new home loan, the borrower is able to pay off the remaining high intrest rate debt at mortgage rates and over a longer period time.

Refinancing a home mortgage in the United State may have some tax advantages.