What is cash-out refinancing?

Cash-out refinancing is a process where you replace your current mortgage with a new one, taking out a larger loan than your existing balance. The difference between the new home loan and your existing home loan is paid out to you in cash. You can look at it as a way to tap into the equity you’ve built up in your home.

How does cash out refinancing work?

Here’s how it works. What is cash out refinancing? Cash out refinancing is where you access the equity you've built in your home to refinance to a higher loan amount and then you take out the difference in cash. Unlike in a standard refinance, you wouldn't apply for a loan to cover the amount remaining on your loan balance.

Can You cash out a home loan?

Any home loan that has the funds released to you directly is considered cash out by the banks. You can cash out your equity in a home by refinancing your current home loan. Some banks will decline your application due to the amount of equity you want released and how you plan to use it.