Paying down your mortgage with a home equity loan - 2004-02-22
For quite a while, Jerry and Staci Reichelscheimer wanted to refinance their mortgage to obtain a lower rate. But they balked at the closing costs. Then they had an idea -- why not pay off their mortgage with a no-cost home equity loan?

So they did. They got a home equity loan with no closing costs and used the proceeds to pay off their primary mortgage, effectively turning their equity loan into a first mortgage.
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FAQ about trading equity for cash - 2004-02-22
Leveraging the equity in your home can be a smart wise financial move, especially when interest rates are low. For some homeowners, the liquidity provides new opportunities for investing, while for others paying off high-interest debt saves thousands of dollars in interest and on taxes.

What is cash-out refinancing?
Cash-out refinancing is a transaction in which a new mortgage is issued that is greater than the outstanding unpaid principal balance of the previous mortgage.
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