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What is a cash-out refinance?

Quick answer

A cash-out refinance replaces your existing mortgage with a larger one, and you pocket the difference in cash. Useful for home renovations or paying off high-interest debt. Drawback: you reset your loan term and typically pay a 0.25-0.5% rate premium vs a standard refi.

More context

A cash-out refinance replaces your existing mortgage with a larger one, and you pocket the difference in cash. Useful for home renovations or paying off high-interest debt. Drawback: you reset your loan term and typically pay a 0.25-0.5% rate premium vs a standard refi. The exact answer depends on your specific situation — the numbers above are a strong starting point, but the right next step is to plug in your actual figures.

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