You take out a new loan with a better rate. You use the new loan to pay off the old loan. That’s it.
It’s like taking out a proper loan from a bank to pay off a high-interest credit card.
You can pay off loans early. People often don’t because they don’t have the money (that’s why they took out the loan). A “second mortgage” is the same idea but you get extra cash on top of it if the house has appreciated in value.
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