The most notable risks that come with mortgage refinancing include:
A low appraised value that reduces the benefit of the refinance
Selling your home before reaching the break-even point on your closing costs
Losing your home to foreclosure if you go into mortgage default
Extending your repayment term and paying higher overall interest costs
Leveraging your home equity to splurge rather than improving your finances
Reducing your profit when you sell your home by tapping too much equity