Would someone really refinance their home and rather than take money out of it, put more cash into it in the process? Certainly, if they could get a lower rate, build equity faster and pay off the home sooner, it may make perfect sense for some!
For people with extra cash available, this can be very attractive compared to the low savings rates being paid by banks.
In the example below of a loan at 5% interest with a 30 year term, the current mortgage principal balance is $234,075 after 48 payments of $1,342.05. The owner can refinance for 15 years at 3.37%. If they put $36,000 into the refinance, their payments will be slightly more than for the original loan, but the mortgage will be paid off in 15 years instead of 26. At that same point, if they keep the current mortgage, their unpaid balance will be $136,049.03. For less than $90 per month more on their mortgage payment, they can have a free and clear home 11 years sooner.
If you have a goal to get your home paid off and have the available funds, a Cash-In Refinance may be just the strategy for you.