Mortgage refinancing is a process that allows borrowers to replace their existing mortgage with a new one that has more favorable terms. This process involves liquidating the old mortgage and replacing it with a new one, which is why it's often referred to as term refinancing. Refinancing can help borrowers get a better interest rate on their mortgage, but it's important to consider whether doing so will save you enough money to make it worthwhile. When you refinance your mortgage, a credit check is done, which can temporarily hurt your credit score. However, this is only temporary and your score will adjust over time.
It's important to note that refinancing is different from getting a second mortgage, as the new mortgage replaces your current loan.