Resources > Glossary > Cash-Out Refinance

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Cash-Out Refinance

Function: noun

Definition 1:
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose. There are many investers who have owned several properties for years, who regularly cash-out every ten years, and put the money in their bank account. Cashing out is a way they can get large amounts of cash without paying any tax on it in the short run.