Cash-Out Refinance
Definition of 'Cash-Out Refinance'A mortgage refinancing transaction in which the new mortgage amount is greater than the existing mortgage amount, plus loan settlement costs. The purpose of a cash-out refinance is to extract equity from the borrower's home. A cash-out refinance is an alternative to a home equity loan. |
|
Investopedia explains 'Cash-Out Refinance'Cash-out refinances are a popular way for borrowers to access the equity in their homes to pay down consumer debt or make additional purchases. Borrowers need to make a risk-based assessment of whether extracting equity from a home is economical. Borrowers also need to be aware that refinancing a mortgage has costs, including the fact that the lender may charge a higher interest rate on a cash-out refinance than a rate-and-term refinance. |
Related Definitions
Articles Of Interest
-
Understanding Your Mortgage
We walk through the steps needed to secure the best loan to finance the purchase of your home. -
Make A Risk-Based Mortgage Decision
Find out how to choose which mortgage style is right for you. -
How Mortgage Refinancing Affects Your Net Worth
Find out how to determine whether refinancing will put you ahead or even more behind. -
Should You Refinance Your Mortgage When Interest Rates Drop?
Refinancing is a great way for many homeowners to improve their financial situation - but beware of the downsides. -
6 Tips For Selling Your Home Fast
Find out what you can do to stand out from the competition and make your home an easy sell. -
5 Smart Ways To Use Your Tax Return
This year, find out how to stretch your tax refund further to strengthen your future. -
Common Liabilities That Hurt Your Net Worth
Every penny that you keep out of the liability side of the net worth equation essentially ends up on the asset side. -
The Dangers Of A Reverse Mortgage
In many circumstances, a reverse mortgage can be a risk to your financial security. Here are six dangers you should consider before signing on the bottom line. -
Automatic Cancellation Of PMI When You're Underwater On Your Mortgage
You might be suprised to learn that after reaching certain criteria, your PMI will be automatically cancelled. -
What Homeowners Need To Know About Zombie Titles
Understanding how the foreclosure process normally works - and how it dysfunctions in today’s market - will help you avoid becoming a victim.
Free Annual Reports