There are two main types of refinancing:
Rate and Term Refinance
In a rate and term refinance, you would typically be obtaining a new mortgage with a lower interest rate, as well as possibly a shorter payment term. With the recent record-low interest rates, refinancing a 30-year mortgage into a 15-year mortgage may allow for similar monthly payments as the original loan. This is because of the lower amount of interest that would be paid on the new mortgage, even though 15-year mortgage payments are usually higher than the 30-year loans.
In a cash-out refinance, you can refinance a certain percentage of the current value of your home for cash. Thus, why it is called cash-out refinance. In a cash-out refinance you are not always saving money by refinancing, but instead obtaining a type of lower-interest loan on some needed cash. Reasons for taking a cash-out refinance could be that you want to remodel your kitchen, pay for higher education, or even consolidate debt.