A mortgage refinance is simply the re-writing of the first mortgage on your home. It can be structured many different ways. Some examples are:

1. No cash out. This is the refinancing of an existing mortgage balance only. The fees associated with refinancing a home are often included are not considered cash out, because they are not proceeds given to the borrower. 
2. Cash Out. There are several types of cash out refinancing, whereby the borrower is given proceeds for items other than re-writing a first mortgage balance or the fees associated with it.
  a. Debt consolidation - Credit card debts and other bills are included in the new mortgage balance. 
   b. Second mortgage or home equity loan refinancing - A payoff for a secondary lien is included in the new mortgage loan with the existing first mortgage balance. 
   c. Home improvement - Proceeds are provided directly to the borrower or the funds can be directed to the home improvement companies out of escrow. 
   d. Educational expenses, vacation plans, etc. etc.
 
-----NOTE: Most conventional mortgage programs have limits on cash out amounts. Loans that do not fit the normal guidelines may be financed at a higher rate. Please ask the mortgage professional that you choose to discuss all available options.

3. Sub-prime and bad credit. Even if you have less than perfect credit, possibly with some current late payments, you may be able to refinance your home loan on a cash out basis. Almost every lender has some unique features to their lending programs, so be prepared to shop. Mortgage brokers do sometimes specialize, however, most are able to sell the programs of several lenders. This can be especially helpful, if you have a difficult situation.

As with any residential mortgage loan....
Do not make assumptions. If you are unsure about anything...
ASK YOUR MORTGAGE COMPANY QUESTIONS!

4. Do not assume that the mortgage interest of this loan will be tax deductible. Consult a qualified tax advisor for potential tax benefits.
5. Inquire about all fees and costs associated with this loan, including the mortgage rate and APR (annual percentage rate) and whether the interest rate will be fixed or adjustable (ARM - Adjustable Rate Mortgage). 
6. Be sure to ask if there is a pre-payment penalty for paying off the loan too early or making substantially large payments against the principal.