This especially works well for people who got their first mortgage when rates were considerably higher than they presently are. A lower interest rate means lower monthly payments and this concept is attractive to many home owners. These individuals are most likely seeking to move from one fixed rate loan into another, just at a lower interest rate. Fixed rate mortgages are viewed by most as the lowest risk mortgage through a lender. If a home owner locks their mortgage into a low rate, they can be assured that they will maintain that rate even if the market fluctuates upward and rates begin to soar.
Some people consider refinancing in order to shorten their loan term.
They may do this to get what they consider a better rate or to seek a rate that is consistent over the term of the mortgage instead of changing during the term. Another reason some people consider refinancing their mortgage is to consolidate their debts. Others want to get money to use for home improvements or to help pay education costs. Some people may want to refinance because of divorce. They want to remove the other person's name from the mortgage papers.