Taking out a mortgage is a big step, and if there's one payment each fortnight or month that causes the most headaches, it's almost always the mortgage payment. Mostly because it's the biggest! If you've had your home loan for a while, but are struggling to meet the payments, then refinancing your mortgage may be something worth considering. Or perhaps you've built up a lot of high interest rate debt, such as credit card debt, and really need some relief to make things easier.

Basically, refinancing your mortgage means that you pay off your loan with your current lender, by taking out a loan with another lender. The reasons people choose to do this are almost as endless as people themselves, but generally there are a few main reasons. One is to change your loan type - for example, to move from an adjustable (variable) rate mortgage into a fixed mortgage. It might be that your income or credit rating have improved since you first took out your home loan, and so now you're eligible for a better deal. Your house may have increased in value and you want to take advantage of that to consolidate your debts. Mostly, though, people refinance their mortgage so that they can get a better deal - and lower repayments.

Refinancing your mortgage isn't hugely different to applying for a mortgage in the first place. As a minimum, you will still need to produce financial records, earning details and credit reports as part of the application process. You must list your debts and assets, verify your employment, produce financial accounts such as bank statements, have a copy of the title of your land, and generally just prove that you're worth the risk.

It's also necessary to provide details of your current monthly mortgage payment and your outstanding mortgage balance. It's generally helpful to also show the status of insurance payments and property tax. You also need to provide the contact details for your current lender, so that the new lender can coordinate the refinancing.

Of course, none of this happens for free - mortgage refinancing involves just as many fees as taking out your initial mortgage. Perhaps even a few more! So be prepared to pay for things such as:

- application fee

- title search

- title insurance fees

- appraisal costs

- prepayment penalties

- loan origination fee

- discount points

- legal service fees.

It may be possible to negotiate some of these fees, to help make the refinancing easier. It may also be possible to add some of the fees to your new loan balance. You need to ask about these possibilities as early in the process as possible.

Mortgage refinancing is a big step, there's a lot involved, and it's worth thinking through a few questions before going ahead with it. For example, think about:

- how long you expect to stay in your house

- how many years remain on your existing mortgage

- can you afford to pay the costs involved in refinancing

- will you still be able to put some money aside for a rainy day

Spend some time running your numbers through a mortgage calculator, or else sit down with a good mortgage broker and let the broker do the number crunching for you. It may also be a good idea to talk to your financial adviser, and perhaps even your original lending company. You may be able to make some changes to your loan or loan package, without having to incur all the costs involved in a complete mortgage refinance.