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Cash-out refinancing

Knowing how cash-out refinancing works — and the advantages — can help you decide if it’s right for you.Knowing how cash-out refinancing works — and the advantages — can help you decide if it’s right for you.


Cash-out refinancing

What exactly is cash-out refinancing and how does it work? Quite simply, you take out a new home loan to pay your first mortgage, PLUS you convert a portion of your available home equity into cash - which is paid to you at closing in a lump sum. The extra cash amount is added to your new home loan.

Another benefit of cash-out refinancing: Debt Consolidation

If you're carrying a lot of credit card debt at a higher interest rate than your home loan, a cash-out refinance can be a smart move. Using the same example as we used above, here's how it might work.

Consider, too, that you get the benefit of tax-deductibility with a mortgage loan; a benefit you don't enjoy with other debt.

Remember this. If you choose cash-out refinance, be sure to use this option responsibly and make your payments in full and on time. You will be adding debt to your mortgage, and you don't want to risk losing your home.


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Product
APY**
Minimum balances
Available as IRA
Available as Custodial
APY**
Minimum balances
Available as IRA
Available as Custodial