Mortgage interest rates rose throughout most of 2023, soaring above an average of 7% for a 30-year, fixed-rate mortgage at one point. This meant that few homeowners refinanced their mortgage loans last year. After all, the main goal of a refinance usually is to end up with a new loan with a lower interest rate. That didn't happen last year.
When you refinance, you are swapping out your current mortgage loan for a new one. Your lender will need to check your credit reports and credit score and make sure your monthly income is high enough for you to afford your new mortgage payment.
A cash-out refinance is a way for homeowners with enough equity in their residences to access a lump sum of cash. They can then use that cash for anything they want, from paying down high-interest-rate credit card debt or funding a kitchen remodel to paying for a child’s college tuition.
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