100% Mortage Refinancing

While the difference is subtle, a mortgage refinance works a little differently.You still access the equity in your home, but you're getting to it in a slightly different way. With a refinance, you replace your existing loan with a new loan and ask for an additional amount (equal to the equity value) which is added to the new loan. By refinancing equal to 100 percent of the home's value, you only end up with one and not multiple loans.

For example, let's say John and Alison want to update their bathrooms. They decide to refinance their current mortgage and access some equity to help cover the costs.

First, they need to figure out how much they owe on their current loan. Their current mortgage balance is $80,000, and appraisals value their home at $100,000. They could refinance 100 percent of their home's value and use the $20,000 left over to help with remodeling costs.