In a home refinance, your new loan will pay off the old loan, and allow you to start over with a new rate and better terms. Lenders take your application and do a thorough check of your finances and credit (again) before providing you with a loan estimate that outlines the terms and costs of your new mortgage.
Shopping around can save you money when refinancing your home. To get the lowest refinance rates, shop with at least three or more lenders, and make sure your credit and finances are in good shape to boost your chances of a refinance approval.
Refinance lenders will also order a home appraisal to gauge the current value of your home and determine how much equity you have. Typically, you need at least 20% equity for a home refinance, however, some loan programs allow you to refinance with much less equity.