A Cash-Out Refinance is a mortgage refinancing option that replaces the previous mortgage loan with a new mortgage loan of a higher value, allowing borrowers to take the difference out in cash.
This cash can be used for home improvements and paying off other large debts but is not restricted to those two categories.
Cash-Out Refinances are the most beneficial when you need extra cash and when interest rates are low.
Why is that the case? Not only will this reduce the amount of interest you pay each month, but you will also get money back into your pocket.
Although it is best to do a Cash-Out Refinance when interest rates are low, this type of loan still has a higher interest rate than your typical Rate & Term Refinance because your loan amount is higher.
For more info, contact a HBLending Home Loan Expert.