Cash Our Refinancing
Cash out refinancing is a type of mortgage refinancing where a borrower pays off current mortgage by getting a new mortgage and get some cash out. Of course, the new mortgage (loan) will be larger than the current one due to cash out. Let’s say that your current house worth/appraised for $250,000 and you currently owe $100,000 to the current lender. Let’s say that you want to make some home improvement to your house or you want to consolidate your debts by borrowing another $50,000. In this case, when you try to get a new loan, the new mortgage (loan) is considered Cash Out Refinance. You will tell the new lender that you want to get $50,000 Cash Out by refinancing your current mortgage. Your new loan (principle) will increase by $50,000 plus other fees (closing costs). Let’s say the fees (closing costs) are around $10,000. So, your new loan will be ($100,000 Current Mortgage + $50,000 Cash Out + 10,000 Fees) = $160,000 will be your new mortgage(loan).
Borrowers normally pay higher interest rate on Cash Out Refinance than Rate/Term Refinance. Under rate/term refinance, normally the principle/current mortgage amount stays the same plus closing costs. The main reason to do a cash out refinance is that most likely the cheapest money you can borrow compared to borrowing from credit cards or getting a personal loan. Once again, with Cash Out Refinance, your current (existing) mortgage (loan) is paid off and replaced with a new mortgage with a larger amount as it explained in a above example.
Home Much Can You Get On A Cash Out Refinance?
The answer is it depends on meeting certain requirements. If you want to find out how much you can get, please fill out this simple form and I will get back with you as soon as possible
