What term refers to a refinance transaction where proceeds are used to provide cash or pay unsecured debts?

The term that refers to a refinance transaction where the proceeds are utilized to provide cash or pay off unsecured debts is a Cash-Out Refinance. This type of refinancing allows a borrower to tap into the equity of their home by getting a new mortgage for a larger amount than what is currently owed and receiving the difference in cash. This is particularly useful for individuals who want to consolidate high-interest unsecured debts or fund other major expenses, such as home improvements or medical bills.

In this situation, the borrower essentially increases the loan amount, and this additional cash can be used for various financial needs. Cash-Out Refinances can often result in a lower overall interest rate compared to unsecured debt, making it an attractive option for many homeowners looking to manage their finances more effectively.

The other terms mentioned do not carry the same implications. A Standard Refinance generally refers to simply replacing an existing loan with a new one without adding any cash, while a Rate and Term Refinance focuses solely on reducing the interest rate or changing the loan term. A Debt Consolidation Refinance also involves combining debts but is usually considered to be a separate financial product focusing on consolidating multiple debts into a single loan, rather than specifically a cash-out transaction.