A cash-out loan is a type of refinancing loan that allows homeowners to tap into the equity they have built up in their property and convert it into cash. Essentially, a cash-out loan replaces the existing mortgage with a new loan for a higher amount, and the difference is paid out to the homeowner in cash. This type of loan is commonly used to fund home renovations, pay off high-interest debt, or cover unexpected expenses. It can be a smart financial move for those who need access to cash, but it’s important to carefully consider the terms and fees associated with the loan before proceeding. It’s always recommended to work with a trusted lender or financial advisor to determine if a cash-out loan is the right choice for your particular situation.