Cash-out Refinancing

This Issue in United States

Cash-out Refinancing in the Context of Mortgage Refinancings

In this context, a definition of Cash-out Refinancing may be distilled, worded as follows: When refinancing, taking a loan for more than you owe on your existing mortgage. Your existing mortgage is paid off and you receive an additional payment for the balance of the new loan. You might do this if you want to make home improvements or pay for a child’s education. Cash-out refinancing removes some of the equity you have built up in your home.