Cash-Out Refinance
A cash-out refinance replaces your existing mortgage with a new, larger loan — and the difference between the old balance and the new loan amount is paid to you in cash at closing.
Borrowers use cash-out refinances to access home equity for purposes such as home improvements, debt consolidation, education costs, or investment opportunities. The new loan amount includes the original balance plus the cash withdrawn.
A cash-out refinance is not free money. It increases your loan balance and may reset your amortization schedule. If your new rate is higher than your existing one, your monthly payment could increase even beyond the added balance.
Why This Matters: Tapping your home equity can be a smart financial move — but only if the purpose justifies the cost. Understanding the full impact on your payment, term, and long-term interest cost helps you make a decision you will not regret.
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Understanding a term is one thing. Knowing how it affects your loan, your rate, or your closing costs is another. Kara can walk you through exactly how this applies to your file — in plain language, in 30 minutes.
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