What is a cash out refinance? This means that you refinance your mortgage for an amount higher than you currently owe, often for a different interest rate and loan term, which leaves extra cash for you. You are cashing out equity in your home for home improvement, large expenditures and even debt or credit card consolidation. This type of refinance will usually yield a lower interest rate than you could ever get from a credit card lender. Often, the loan programs will require the closing company to pay your creditors directly, and/or they may want evidence of home improvements, but it's worth it to get a much lower interest loan.