There are two types of Refinancing: Rate & Term or No Cash Out Refinance and the Debt Consolidation/Cash Out Refinance.
A Rate & Term Refinance simple pays off the existing mortgage on a property with no additional cash. It is usually used to lower the mortgage payment, change the length of term of the mortgage, or to lower the interest rate.
A Cash Out Refinance allows the homeowner to refinance there home usually at a lower overall rate and cost by consolidating multiple debts into one payment. Additional cash can also be taken from the equity of the home for use in remodel projects, investing in other assets, college tuition, or for whatever the homeowner want to use the money for. This it completely at their discretion.