Cash-out refinancing is when you take out a new mortgage on your home, whether you have full ownership of the home or are still paying-off your existing mortgage. Cash-out refinance is different than a home equity loan or a line of credit, which are second loans taken out on top of your first mortgage. Cash-out refinancing is simply a new first mortgage.
When you apply for cash-out refinancing the difference in your existing debt on your house and the equity of your home is calculated and paid to you as cash. Homeowners often use the equity built in their home to in to cash. With an increased cash flow homeowners can consolidate their debt, or use the cash for a specific financial purpose. The advantage of cash-out refinance over home equity loans is their reduced risk and often lower rates. Depending on your personal financial needs, cash-out refinancing may be a good choice or can be unwise.
Our licensed mortgage brokers have years of experience with assessing your individual financial needs and offering sound advice. To learn if cash-out refinancing is a rational choice to make, contact one of our agents.
