A cash out refinance Cash-out mortgage refinancing lets you refinance your mortgage, borrow more than you currently owe and keep the difference as cash. It’s one way to unlock the equity, or ownership, you’ve built in your house.
The money from cash-out refinancing is usually put back into home improvements, but some people also use them to offset the upfront costs of refinancing or cover personal expenses.
Key Benefits Of A Cash Out Refinance Loan
Home improvements will increase your homes value
Payoff high interest credit cards, consolidate loans and have a lower monthly expense payment
Pay for critical life events like school or medical bills
Interest Rates Drop and you can Re-finance, Cash out and still have a lower total monthly mortgage payment
How Does A Cash Out Refinance Loan Work
Let's say your home is worth $600,000 and the balance of your mortgage is $300,000, that leaves you $300,000 in equity. You have 50% equity in your home.
If you would like to retain 20% of the equity in your home 20%=$120,000 or $480,000 less $300,000, there is $180,000 of cash equity that you are eligible to borrow.
When considering a cash out refinance remember to take into account your homes LTV (Loan to value) LTV is the ratio of your current mortgage balance compared to the market value of your home, as determined by appraisal and your DTI (Debt to income)ratios. DTI is the percentage of your gross income that goes into repaying any debt, such as monthly mortgage payments, student loans and credit card balances.
If you would like to retain 20% of the equity in your home 20%=$120,000 or $480,000 less $300,000, there is $180,000 of cash equity that you are eligible to borrow. Call today for a FREE Consultation and see what your home is eligible for. 800-826-5077.