Cash-Out Refinance vs. Rate-and-Term Refinance: Which One Is Right for You?
When considering refinancing your mortgage, two main options often come to the forefront: Cash-Out Refinance and Rate-and-Term Refinance. Both allow you to change the terms of your mortgage, but they serve different purposes and have distinct advantages. Understanding the differences between these two refinancing options is crucial to making an informed decision that best aligns with your financial goals. What Is a Cash-Out Refinance?A Cash-Out Refinance allows you to replace your existing mortgage with a new one for more than you currently owe. You receive the difference in cash, which you can use for various purposes, such as paying off…