what are the risks of a cash out refinance 
a cash out refinance increases the mortgage loan balance since it reduces the equity in the home in exchange for cash as a result borrowers who lose their jobs or experience a reduction in income are at a greater risk of default or foreclosure the bottom linerate and term refinancing usually means a lower interest rate and a more favorable loan term however the principal balance remains the same while the monthly payment is often lower if you refinance and opt not to lower your payment you can pay off the mortgage more quickly however it s important to consider the costs and fees of refinancing and whether the monthly amount saved is worth it 