Direct Private Capital Group, Inc.

Cash-out refinancing is when you take out a new mortgage to pay off an existing loan. This can be done for reasons such as paying off another mortgage or making home improvements. You might also use cash-out refinancing to consolidate your student loans, credit cards, or other debt.

Cash-out refinancing can lower your monthly payments by reducing the interest rate on your new loan. But it can also raise your monthly payment by increasing the principal you owe each month, which may negate any savings from lowering your interest rate.

You’ll need to know how much equity you have in your home to determine if you’re eligible for a cash-out to refinance loan and what kind of interest rate you’ll qualify for. The lender will also determine how much they’ll lend based on factors like the value of your home and what type of property it is (such as an apartment building).