Cash-Out Refinance

What is Cash-Out Refinancing?

Cash-out refinancing allows homeowners to access their home equity by replacing their existing loan with a new, larger loan and receiving the difference in cash.

How Does Cash-Out Refinancing Work?

With a cash-out refinance, you borrow more than your current loan balance. The new loan pays off your existing mortgage, and you receive the difference in cash. This new loan often comes with a different interest rate and term.

Benefits of Cash-Out Refinancing

• Home Improvements: Use the funds to increase the value of your home through renovations.
• Debt Consolidation: Pay off high-interest debts, such as credit cards or personal loans.
• Lower Interest Rates: Secure a lower rate compared to personal loans or credit cards.
• Tax Benefits: In some cases, mortgage interest may be tax-deductible.

Risks of Cash-Out Refinancing

• Increases your total mortgage balance and monthly payments.
• Extends the term of your loan, meaning you’ll pay more in interest over time.
• Risk of foreclosure if you can’t make the new payments.