Pay for Home Improvements or Consolidate Debt
A cash-out refinance converts the equity you have in your home into cash that you can use to pay for home improvements or pay off debts, such as on a second mortgage or high-interest-rate credit card balances.
Equity has value, which means it can be converted into cash when you use it as collateral for another loan. This not only gives you cash to pay off debts, it also consolidates your existing debts into a new loan with a single monthly payment.