Unlock Your Home's Value
A cash-out refinance allows a borrower to access equity in their home by refinancing with a new loan. The borrower takes out a new loan for more than the balance on their original mortgage. The difference is paid to the borrower in cash. For example, if a borrower has a mortgage balance of $100,000 and takes out a new loan for $150,000, they get $50,000 in cash at closing. This cash can be used for any purpose.
To qualify for a cash-out refinance, borrowers typically need equity in their home and a good credit score. They may also need to meet income and debt-to-income ratio requirements. This type of refinance can be a good option for borrowers who need cash and have built up equity in their home. However, it’s important to carefully consider the terms and costs of the new loan before committing. This includes understanding the interest rate, fees, and any prepayment penalties. A cash-out refinance can increase the overall cost and interest paid on the loan. It’s a good idea to consult with a mortgage advisor to ensure that a cash-out refinance is a suitable option for their financial situation.
- Access equity
- New, larger mortgage
- Receive cash
- Higher loan balance
- Higher monthly payments
A cash-out refinance is a great way to tap into the equity in your home and use it to achieve your financial goals, whether that’s paying off debts, making home improvements, or financing a major purchase.
