Refinancing a mortgage can save homeowner’s a substantial amount of money over the life of a home loan.
If current interest rates are lower than the rate you are paying on your mortgage, refinancing could lower your monthly payment. For example, if you have $250,000 remaining on your mortgage at 6% for 30 years, your monthly payment (principal and interest) would be $1,499. If you were able to refinance to a 5% loan for 30 years, your monthly payment (principal and interest) would drop to $1,342, a reduction of more than $150 per month. Some of the reduction, however, may be due to stretching out your payments rather than reducing your rate. 
Refinancing could allow you to:
Switch from a long-term loan to a short-term.  This might be particularly beneficial to you if you are now able to afford a higher monthly mortgage payment. Switching from a 30-year loan to a 15-year loan results in higher monthly payments but pays the loan off much more quickly, saving thousands of dollars in interest payments.
Avoid the increasing payments of an Adjustable Rate Mortgage (ARM) by switching to a fixed-rate mortgage. While the monthly payments on a fixed-rate mortgage may initially be higher than the payment on your ARM, you may like the peace of mind knowing your payment will remain the same, even if interest rates continue to rise.
Change from a Fixed-rate to an Adjustable-rate Mortgage. Sometimes it makes sense to switch to a mortgage that could lower your rate and your monthly payment.  Another example is when short-term rates are lower than long-term rates, and refinancing into an ARM would save you money.
Use the equity in your home. If you have equity in your home you may want to pursue a “cash out” refinance. You may choose to use the funds for things such as:
  • Purchasing additional property
  • Your child's education
  • Debt reduction