A cash out refinance loan allows you to get a new loan that is larger than the remaining balance of your current mortgage, based upon the equity you have already built up in the house, and receive a cash balance of that lump sum. The cash out amount is calculated by subtracting the sum of the old loan and fees from the new mortgage loan. Several ways to cash out when you refinance are consolidate your credit card debt, make a debt pay off, home improvement loans, auto loan pay offs and any other high-interest bills you may have into one low monthly mortgage payment. The interest rate may be a tax deduction. Consult your CPA or tax consultant for additional information.