Refinancing : What do You Know ???

Some people told me to be ready for refinancing my current mortgage with a new loan, what for??? he told me that action is much better for secured loans, She told me that refinancing replaces your current mortgage with a new loan that has a more favorable interest rate and terms that you can afford to manage.

In wich that my new loan is secured on the same property as your current loan. The new loan funds are used to pay down the current mortgage while any remaining money can be used to your best advantage.

So this is the little scheme for describe the refinancing,
Example: Mr. Andi and Mr. James both took out a mortgage loan worth $400,000. After 4 years, both of them paid off $200,000. Mr. Andi then took out another home loan worth $200,000 in order to repay the existing loan balance.

And then on the other hand, Mr. James took out another mortgage worth $300,000 in order to repay the unpaid loan balance which is $200,000. Mr. James could use the remaining balance in order to fulfill other financial obligations.

That is just simply description about refinancing, The first scenario is a simple refinance while the second is that of a "cash-out refinance".