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When you want to free-up your home equity and turn it into available cash, you take out a cashout loan. It's just like a normal refinance, only your new mortgage lender (who pays off your existing mortgage) is loaning you cash on top of your old mortgage loan. Using the original example, if your home equity is $200,00 and 

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May 15, 2015 The VA cash-out refinance allows homeowners to tap into their home equity, up to 100% of the current value. Check rates and guidelines here.