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, and get a shorter term. 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 to give yourself 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.