Mortgage Glossary
Cash Out Refinance
Also called: cashout refi, cash out refi, take equity out
Definition
Replacing your existing mortgage with a larger one and receiving the difference in cash at closing, minus closing costs.
Why it matters
It converts equity into usable funds at a fixed rate, but it resets your first mortgage rate and term.
Related terms
- HELOC
- A Home Equity Line of Credit is a revolving credit line secured by your home. You draw what you need during a draw period and repay it, similar to a credit card secured by the property.
- Equity
- The difference between what your home is worth and what you still owe on loans secured by it.
- Refinance
- Replacing an existing mortgage with a new loan, either to change the rate and term or to access equity.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
General education only, not financial, legal or tax advice, and not a commitment to lend. Guidelines vary by program and change over time. Manny Oloyede, NMLS #1824463. Ultimate Mortgage Brokers LLC, NMLS #2619461. Licensed in OH | KY | NC | PA | SC | TN | TX. Equal Housing Opportunity.
Want this applied to your actual numbers?
Definitions are the easy part. What matters is how the guideline reads against your income, credit and property.