 TITLE: Is a Cash-Out Refinance a Good Idea? CONTENT: When Does It Make Sense to Use a Cash-Out Refinance?\n----------------------------------------------------\nA cash-out refi may make sense if you have a specific reason to borrow money and can qualify for a mortgage with a better interest rate than you currently have. Here are some reasons to consider a cash-out refi:\n*   **You qualify for a lower interest rate.** Even if you're not interested in taking cash out, you may want to consider refinancing your mortgage if you can get a lower interest rate. Mortgages tend to carry high balances and have long repayment periods, so even a small interest rate drop can lead to significant savings. If you reset the repayment term to the same number of years as your previous mortgage, your monthly payment may also drop—but you could wind up paying more interest overall due to the longer term and larger debt.\n*   **You want to pay off high-rate debt.** If you have other loans or credit card debt that you're working to pay off, using a cash-out refi to get a low-rate loan and paying off your current debts could save you money. This is only a good strategy if you can commit to not running up your card balances again after paying them off.\n*   **You want to renovate or repair your home.** Planning to use the money from a cash-out refinance to repair, maintain or improve your home could be a good move, as the money can help protect (or improve) the home's value. Using the money this way may also allow you to claim a tax deduction for the interest on the cash-out portion of your mortgage.\n*   **You want to use the money to pay for college.** Low interest rates and a manageable additional monthly payment can make this an attractive option for covering tuition and other college expenses. END