Rate and Term refinances allow homeowners to pay off an existing California mortgage only. These funds cannot be used for things such as home improvement or to purchase an automobile. Second mortgages that are at least 12 months old and do not have draws or advances exceeding $2,000 in the past 12 months are classified as rate and term refinances for Jumbo loans, but are considered cash-out refinances for conforming loans.
Similar to a cash out refinance , the proceeds from limited cash-out refinance can be used for multiple purposes. However, homeowners will be limited in the amount they can borrow. Homeowners can borrow enough to pay off their California mortgage debt and either 2 percent of the loan amount or $2,000, whichever is lesser, for other purposes such as home improvement.
| 
