Cash-Out Refi Offer in the Mail...Worth Considering?

Got an offer in the mail for a cash-out refi. Something I haven't thought about, but that cash in hand sounds enticing. I know that's how they get you.

The offer had a 5.89% APR. Right now, I'm at 6.50% (that may be rate or APR...I have to check). This is contingent on credit. I'm going to assume I would qualify for the new rate based on my credit. It mentioned it would be FHA, which I don't fully understand as this was never discussed with me when shopping for a mortgage. I'm currently at ~72% LTV.

The downsides seem to be resetting my term (I'm 3 years into a 30-year) and fees (not disclosed at all...I assume appraisal and closing would apply at least). And I'd get to 80% LTV, which is how I assume they came up with their offer.

The upside seems to be, according to the offer, $65k-ish in cash, which I'd be paying for at the new rate on the mortgage. And a slightly lower mortgage rate, but payments would probably be similar.

Wouldn't be thrilled about taking on more debt, but I do have some home improvement projects in mind and this seems like it might be a relatively cheap way to pay for them. One of the big projects is redoing landscaping pavers, which I don't believe would add any value to the home. Another would be kitchen remodel, which I believe would add some value.

I think moving in the next 10 years is a real possibility, so it seems like there is also some increased risk if home values tank.

I haven't done this type of thing before. What am I not thinking about?