Cash-out Refinance

By refinancing your existing mortgage loan with a mortgage that is larger than your current, you can cash-out the difference. The cash-out amount will be the new loan amount minus the old balance and fees. This excess cash can be used for other purposes (home improvement, children's college tuition, investments, or start-up of business'). The cash-out option might be appropriate, but one should consider the options carefully.

An alternative to cashing-out on your home equity by a mortgage refinancing is a home equity loan. This is another way to convert your home equity to cash. This type of loan (second mortgage) is in addition to your current first mortgage.

These two options, cash-out refinancing and a home equity loan, can serve the same purpose. Your situation should determine the right choice for you, and you should compare quotes and interest rates to find the best cash-out solution.