When you refinance, you get a new loan to pay off your current loan. Why? Well to start you can get a lower interest rate, convert equity to cash, get a shorter term, and more. Refinancing gets you a better loan.
Have home values gone up? Have interest rates gone down? There are many reasons to refinance, but the best reason is creating lower monthly payments, or significant savings over the life of the loan.
Cash-out refinancing is an option that allows you to receive part of your home’s equity as cash when you refinance. Your new loan will be larger than your current loan however you can use this money as you wish.