Cash-Out Refinances Hit Highest Level Since 2007
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Some homeowners who refinance a mortgage get a new loan that equals the amount they owed on their previous loan. But that's not the only option. Those who do a cash-out refinance can borrow more than their existing loan balances and take the excess money as cash to spend as they please.
The latter move is one a lot of borrowers made in 2020. Last year, homeowners cashed out a whopping $152.7 billion in home equity. That's a 42% increase from 2019 and the highest level of cash-out refinancing on record since 2007, according to Freddie Mac. But while an uptick in cash-out refinancing activity is a good thing in some regards, it can also be problematic.
Source Fool.com
