Recently, more and more homeowners have begun taking advantage of the various mortgage refinancing options available to consumers. The third quarter of 2006 saw the highest number of "cash-out" mortgage refinances of any quarter since 1990. [1] While cash-out refinancing can put money in the homeowner's pocket for things such as home repairs or remodeling, or simply free up money to consolidate and pay off other debts, higher interest rates on a higher amount of money financed as a mortgage may not make good financial sense. Homeowners should also be wary of the recently highly publicized "interest-only" refinancing option which lowers payments in the short-term but increases them dramatically after only a short period of time. [2]
Cash-out refinancing is a mortgage refinancing option that allows a homeowner to collect a check at the closing for the amount of cash taken out of the equity built in the home,with