Refinancing a mortgage means paying off an existing loan with the intent of replacing it with an updated one.
Refinancing to obtain a lower interest rate is the best reason to move forward with such plans, especially when rates drop in the current market. This in and of itself can shorten the term of your loan and reduce interest payments throughout the life of the loan.
Refinancing to utilize the equity in your home gives you flexibility with the proceeds. You can consolidate your debt and have one monthly payment, or you can use the cash to do home improvements or put additions on your home, like kitchen renovations or a new garage.