This pays off your existing first mortgage and lets you take out some of your home equity in a lump-sum cash payment at closing. This results in a new mortgage loan which may have different terms than your original loan (meaning you may have a different type of loan, a different rate as well as a longer or shorter term/time period for paying off the new loan).
How do you get your money from a cash-out refinance
You receive a lump sum when you close your refinance. The loan proceeds are first used to pay off your existing mortgage(s), and closing costs and any remaining funds are yours to use however you wish. You typically then will receive those funds in the form of a check or wire transfer from escrow at closing
*Cashing out could also help you with: home improvements, an education fund, or consolidating debt. For more details on refinancing, give us a call, we are here to help.