If you’re in need of cash for a home project, consolidating debt, or any other reason and have equity in your home, a cash-out refinance could be your answer. This type of refinance allows you to leverage your home’s equity for cash.
Let’s walk through an example. If you own a $200,000 home and only have $100,000 left to pay on your mortgage, you have $100,000 in equity. Let’s say you need $50,000 in cash for a project. You could take out a cash-out refinance for that amount, leaving you with $50,000 in cash and $150,000 left to pay on your mortgage.