Question 1

What is a cash-out refinance?

Accepted Answer

A cash-out refinance replaces your current mortgage with a new, larger loan. You receive the difference between the new loan amount and what you owe in cash. You can use the cash for home improvements, debt consolidation, or other goals. Your new loan has a new rate and term.

Question 2

How is cash-out refinance different from a HELOC or home equity loan?

Accepted Answer

A cash-out refinance replaces your first mortgage and you get one new loan. A HELOC or home equity loan is a second lien—you keep your existing mortgage and add a separate line or loan. Cash-out refi can have a lower rate but resets your loan term and has closing costs; HELOCs and home equity loans leave your first mortgage unchanged.

Question 3

When does a cash-out refinance make sense?

Accepted Answer

It can make sense when current rates are low and you want to tap a large amount of equity—e.g., for a major renovation or debt consolidation. Compare the new payment and closing costs to a HELOC or home equity loan to see which is better for you.

Question 4

What are typical closing costs for a cash-out refinance?

Accepted Answer

Expect 2-5% of the loan amount. Costs include appraisal, title insurance, origination fees, and recording fees. Some lenders offer no-closing-cost options by rolling costs into the loan or a slightly higher rate.

Compare Cash-Out Refinance Rates for Feb 5, 2026

Frequently Asked Questions

What is a cash-out refinance?

How is cash-out refinance different from a HELOC or home equity loan?

When does a cash-out refinance make sense?

What are typical closing costs for a cash-out refinance?