Bangalore: The recent market turmoil had got radical changes in almost all sectors. But one pleasant development that can be highlighted is the low mortgage rates. The primary reason why people refinance a mortgage is to reduce the monthly payment. And for those who are wondering what mortgage refinance even is? Refinancing is when you take out a second loan to pay off your current loan. It is always advised to the home owners not to refinance unless they could improve their current rate by a minimum of 2 percent. Many opt for this is basically because of two reasons, lower interest rate to save money in interest payments over the life of the loan or they are interested in refinancing with cash out. Whatever your point is, refinancing isn't always a good choice even if it lowers your monthly payment, because there can be hidden traps. Few such dangers to consider before you decide to refinance. Refinancing Can Stretch Out Your Loan Terms Refinancing into a mortgage with a lower interest rate definitely helps you save you money each month. But make sure you note all the overall cost of the loan. For example ten years left to pay on your current loan and you stretch out the payments into a 30-year loan, you will pay more in interest overall to borrow the money and be stuck with 20 extra years of mortgage payments.