Understanding "Cash-Out" Refinanace

[Neil Anthony]

Hello all! I'm kind of new to all of this, and I was wondering if someone could help me understand the benefits of cash-out refinancing. I've heard people say you can take money out/cash-out tax free!

But as I THINK I understand it, you're basically just borrowing more money from a bank right? At the core, it's a loan. And ALL loans are basically tax-free. If you don't pay back the bank their money, they're going to take the house from you. Also, your mortgage will now be higher which I would assume would negatively impact any cash-flow you're receiving from the property you just borrowed against.

Am I correct? I guess I'm just trying to wrap my head around what's the difference between a cash-out refinance and a straight-up bank loan.

Thanks!