Cash Out Refinance

Taking cash out of your home remains the primary reason people refinance. Property has appreciated in value in every area, and people are deciding to use their "dead equity" to reduce debt, pay for home improvements, or make major purchases. We offer many products to unlock the equity in your home or investment property. 

In a cash out refinance, determine the balance of your mortgage, and the amount of cash you are taking out plus any closing costs (remember, I do not charge origination fees so these costs are as low as possible). The total is your loan amount. An appraiser will determine the value of your property which will be used to determine your Loan to Value (LTV). I have loan programs which will allow you to borrow 80, 90, or even 100% of the value of the home in this "Cash Out Refinance" transaction. 

One  way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out," . Thanks to favorable rates, you may be able to do so without increasing your monthly payment. For example, at 8.5%, the payment on a $200,000, 30-year fixed-rate mortgage is $1,538. But at 7.5%, that same payment lets you borrow nearly $20,000 more.

One way to use the extra cash is to pay off any higher-rate loans you have. If you are carrying a $15,000 car loan at 10% and are making minimum payments on a $10,000 credit-card balance at 17%. Your payments could total $680. Assume you refinanced your mortgage, taking out an additional $25,000 to pay off your car and credit-card loans. At 7.5%, your additional monthly mortgage payment would be only $175, you come out $505 ahead ($680-$175=$505).

Of course, all the extra cash needn't go for paying off debts. One client  refinanced an ARM for a fixed-rate loan, they increased their mortgage by $34,000, from $106,000 to $140,000. Using $2,000 of the proceeds to pay their refinancing costs and another $18,000 to pay off a 10% home-equity loan, which had cost them $250 a month. They spent the remaining $14,000 to build a garage and did all this for just $19 a month.                                            

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