1. Reducing Monthly Mortgage Payments

The standard residential mortgage in the US is a 30-year, fixed interest mortgage with fixed repayments. If you took out a mortgage in the high-interest late 80s, or even around the turn of the century, interest rates at the time were probably higher than they are now. Simply refinancing for exactly the same amount would result in a lower monthly mortgage payment in that case, because the interest rate would be lower. Mortgage rates predictions are that political pressures will keep rates lower than otherwise during the election year.

2. Consolidating Debt

If you are carrying balances on credit cards, or you have auto loans and personal loans, the interest in those debts is much higher than the interest on a debt secured by property, such as a mortgage.

3. Reducing The Amount Of Interest Paid Over The Course Of The Loan

If you are managing your monthly payment comfortably, there may still be benefit in refinancing at a lower rate of interest, but keeping the same monthly payment. This would mean that a higher portion of each month's payment would go towards reducing the loan balance, allowing you to pay it off faster, and therefore lowering the total amount of interest paid over the life of the loan.

These are particularly low-interest times right now, as the government tries to prevent a collapse of the housing market - which means your odds are better than average of finding a new mortgage at a lower interest rate.

4. Repaying The Loan Sooner

Some people just want to get their home paid off as fast as possible. This is a great goal to have, especially if you have a high need for security.

Refinancing, especially at a lower interest rate, can allow you to set a shorter term than the standard 30 years, and pay off your home sooner

5. Extracting A Lump Sum Of Equity As Cash

A "cash out" refinancing involves refinancing your home for a larger mortgage than your existing mortgage balance. The difference between the new mortgage amount and the old mortgage amount will appear in your bank account as cash.