Refinance

Getting a new mortgage to replace the original is called refinancing. Refinancing is done to allow a borrower to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created, instead of simply making a new mortgage and throwing out the original mortgage.

–mortgagecalculator.org

The main reason to refinance is to do so for better terms. Most often the purpose will be to obtain a better interest rate. Perhaps because intrest rates have came down since the original loan.

Example:

I once had a number of small loans needing to be renewed by my bank. On a hunch I checked with a competitor to see if I can get a better day. The 2 banks began making me lowball offers to keep or obtain my business.

In the end I received a big reduction in my interest rate saving me 60,000 in one year!

Banks are good at projecting a take it or leave it attitude. Always remember, you can go to a different bank and sometimes you will need to.