Refinancing can be defined as a way for paying off your existing mortgage by taking out a new one. But before taking a loan, think carefully whether you can make the required payments or not, otherwise you could lose your home as well as the equity you've built up.

There are certain lenders who target older or low-income homeowners or those who have credit problems, and offer loans based on the equity in your home and not your repayment capacity. It could be very expensive to borrow money at high interest rates and credit costs, even if you use your home as collateral.

Many a times certain problems arise after closing of the previous mortgage. The old mortgage company claims that the old mortgage is not yet paid off i.e. they had not yet received the money from the new lender although you signed all the documents and got the home refinanced. This generally happens when you may have chosen a wrong lender for refinancing, but it can cost you a lot. So, at the time of refinancing you should be aware of lenders who: