 TITLE: How Does Refinancing a Mortgage Work? CONTENT: Different Types of Refinancing\n------------------------------\nThere are three general types of refinance loans you can apply for: rate-and-term, cash-out and cash-in. Here's what to know about each one.\n### Rate-and-Term Refinance Loan\nWith this type of loan, the goal is to change the interest rate, loan term or both without making any changes to the amount of the loan. This option is best if you're trying to save money on your monthly payment or switch your loan from an adjustable rate to a fixed rate.\n### Cash-Out Refinance Loan\nAs the name suggests, a cash-out refinance involves cashing out a portion of the home's equity. Doing so results in a higher loan amount, with the difference typically equal to the amount cashed out.\nWhile a cash-out refinance can help homeowners get the cash they need for certain activities, it typically results in a higher monthly payment and interest rate than a rate-and-term refinance loan.\n### Cash-In Refinance Loan\nMuch less common than a cash-out refinance is a cash-in refinance. This happens when the homeowner refinances their mortgage loan and brings money to the table to reduce their new mortgage balance.\nA cash-in refinance may be worth considering if you're underwater on your mortgage or want to get rid of private mortgage insurance, qualify for a lower interest rate, or keep your mortgage amount below certain limits. END