Refinancing makes sense for many reasons:

Lower your monthly mortgage payments.  If the current interest rates are lower than your mortgage rate, refinancing may lower your monthly payment.

Stabilize your mortgage payments.  Refinancing out of an adjustable rate mortgage or ARM and into a fixed rate mortgage will keep your rate from adjusting.  Get the security of a fixed rate mortgage.

Consolidate debt.  If you have equity in your home, you may want to consolidate your debts.  Credit cards, second mortgages and other installment loans usually have interest rates higher than mortgage rates.  You may reduce your overall monthly payments by consolidating your debt with a refinance.

Take cash out of your equity.  You may be able to get some cash out of a refinance to pay other bills, do home improvements or finance major expenses.

Reduce the term of your mortgage.  You can pay off your mortgage sooner with a shorter term mortgage, such as a 15-year mortgage.  The monthly payment may be higher when reducing the term, but there is significant savings in interest over the time of the mortgage.  This is a great option for people whose main goal is not to save money on their monthly payment but who want to build up equity and pay off their home more quickly.