A cashout refinance allows a homeowner to access the equity from their home when the proceeds to the borrower exceed $2000 or 2% of the new loan balance. It is important to understand the guidelines of the lender involved, since some lenders will consider other obligations paid off as cash proceeds while some subprime lenders will only consider cash in hand to the borrower as a cashout.

Since cashout refinances present more risk to the lender, and ultimately the investor purchasing the loan, expect to pay a higher interest rate and face other limitations such as reduced loan to value limits or higher closing costs.