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Mortgage loan refinancing is simply obtaining a new mortgage loan to pay off your old mortgage and get new rates. There are a number of reasons why people choose mortgage refinancing. One is to get lower rates, to build home equity faster, or to change their type of loan.

Changing Loan Types

A mortgage loan or a home equity loan is probably the riskiest type of loans since it puts the borrower’s home property in line.

Lenders do not simply approve mortgage loan applications. Lenders also want to make sure that the money they will be lending will be paid back. Naturally, lenders would check on the borrower’s credit worthiness by examining their credit report.

What is a credit report and why is it so important?