What is a "cash out option"?

What is a "cash out option"?

Ron Goodlin (Mortgage Banker and Broker, The Goodlin Group) gives expert video advice on: Generally how far do interest rates need to drop to make it worthwhile for me to refinance?; What can I do if I disagree with the banks appraisal of my home?; Are too good to be true loan offers usually too good to be true? and more...

A cash out refinance option is, in its simplest terms, taking equity out of your home. If you currently have a first mortgage of $500,000 and you need to pull out $100,000 of equity, cash, from your home, then once that's done, instead of a $500,000 mortgage, you will now have a $600,000 mortgage.