In the end, only you can answer that question. However, there are some situations when cash refinancing makes sense. Some people have a second mortgage or a HELOC that has a higher interest rate. You can take money of refinancing your primary mortgage and pay off that second mortgage or HELOC. You will get lower payments at a better interest rate. Not only that, you will have the full ability to claim the mortgage interest you pay on your income taxes. It offers many benefits when you use a cash out refinance to get rid of a second mortgage or an equity line of credit.

Some homeowners have accumulated a ton of debt from credit cards and car loans. If the amount of your debt payments is overwhelming you, using a refinance to get money makes sense. It will help you consolidate your debts into a single payment that is lower than what you are paying now. You will be in a better financial position in this situation. However, it comes with a big caveat. Many take the opportunity to clear their slate with cash refinancing. However, if you go back to spending money like crazy, you are defeating the purpose.

A medical emergency is another reason. Some people find themselves in a situation where they need cash in hand to pay for a critical medical procedure. Medical insurance will cover only certain procedures. In addition, even with insurance, there can be large co-pays and coinsurance requirements that can overwhelm you easily in the financial arena. Using a cash out refinance is one way to clear up that cash deficit. Now, a plastic surgery procedure usually does not qualify as a medical emergency, but again it is completely up to you.

Look at the reality of taking out a fixed rate 30-year mortgage on a short term purchase. Do you want to pay for the next thirty years on a vacation you take and forget about? Do you want to pay for that high end sports car for thirty years but only drive for maybe three or four years? Use a cash out refinancing for the right reasons. It is the responsible thing to do with your mortgage and for your financial future. You can make a real difference in your present financial position with a cash refinancing. However, make sure you do not end up in the same position again. You will not be a happy person.