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Cash Out Refinance
Definition: a unique way of refinancing one’s home wherein the individual takes out a loan for more money than they need in order to pay off the old loan. The excess money is considered “cash out” and is given to the homeowner to do with as he pleases. The balance of the new loan is higher than that of the old loan, so while the homeowner does get cash out of the deal, that money is considered part of the new home loan and is expected to be paid back to the lender at some future date.