What does refinancing a mortgage primarily allow a borrower to do?

Refinancing a mortgage primarily allows a borrower to either access equity for other expenses or obtain lower interest rates. When a borrower refinances, they replace their existing mortgage with a new one, which can be for a different amount or term. This option is particularly beneficial if the market interest rates have decreased, enabling the borrower to secure a more favorable rate, thus reducing their monthly payments or overall loan cost.

Additionally, refinancing can allow borrowers to tap into the equity they have built up in their home, which could then be used for various needs such as home renovations, consolidating debt, or funding major expenses like education. As the value of the property appreciates, the equity increases, giving borrowers financial leverage when refinancing their mortgage.

Other options may reference aspects of mortgage management, but they do not capture the nuanced benefits of refinancing as effectively as the chosen answer, which clearly embodies the primary purposes behind refinancing decisions.