What is meant by prepayments due to cash-out refinancing?

What will be an ideal response?

Cash-out refinancing means refinancing by a borrower in order to monetize the price appreciation of the property. Prepayments due to cash-out refinancing will depend on the increase in housing prices in the economy or region where the property is located. Adding to the incentive for borrowers to monetize price appreciation is the favorable tax law regarding the taxation of capital gains. The federal income tax rules exempt gains up to $500,000 . Thus,
cash-out refinancing may be economic despite a rising mortgage rate and considering transaction costs. Basically, cash-out refinancing is more like housing turnover refinancing because of its tie to housing prices and its insensitivity to mortgage rates.