 TITLE: Do I Have to Pay Taxes on a Cash-Out Refinance? CONTENT: What Is Cash-Out Refinancing?\n-----------------------------\nCash-out refinancing is a way to tap the progress you've made in paying off your home loan without doing something as drastic as selling your home. It replaces your existing mortgage with a new home loan that exceeds the amount that you owe on your house and gives you the difference.\nHere's an example:\nYour home is valued at $300,000.  \nYour mortgage balance is $175,000.  \nYour equity is the difference between those amounts, or $125,000.  \nYour new loan will likely be limited to 80% of the home's value, or $240,000.\nThe maximum amount you can get in cash is the difference between your new loan amount and your previous mortgage balance, or $65,000 in this example.\nYou can receive this cash in the form of a cash payment that you can spend on an array of needs, such as:\n*   Tackling a home improvement project\n*   Wiping out high-interest debt\n*   Funding a retirement account\n*   Paying college tuition\n*   Buying an investment property\n*   Purchasing a second home END