Cash Out Refinance
Cash-out refinancing lets you access the equity in your home and get cash at closing. The existing home mortgage and any liens on the property are paid off and replaced with a new mortgage. If a home is appraised at $100,000 and the borrower's outstanding mortgage loan is $60,000, it is possible to enter into an 80% cash-out refinance transaction for a loan of $80,000 (80% of $100,000). The new mortgage of $80,000 will pay off the $60,000 loan and leave $20,000 cash-out to the borrowers. Depending on the rate you started with, you could end up with a lower rate and a lower payment on the new mortgage, too!
Cash out refinancing is a great example of just one of the benefits of home ownership. As you pay your mortgage, you not only consistently build credit, you are building a real investment, and actual home equity that could one day come in useful should you need it.
What are the benefits?
Cash-out refinancing is a way to access money you already have in your home to pay off bills such as college, medical, new business funding or home improvements. The refinance transaction can also provide you with a better mortgage loan interest rate that will save on your monthly mortgage payments during the loan. And it's tax-deductible!
Many borrowers choose opt for a cash-out refinance because they want a steady interest rate instead of an adjustable rate that comes with home equity lines of credit, or HELOCs.
How can we help?
If you are looking for this type of refinancing, Mid America Mortgage Southwest, Inc. can find a program suited to your financial needs. We offer cash-out programs for Owner-occupied homes and Non-owner occupied homes, with low, affordable rates.
A cash-out refinance is typically easier to obtain than an FHA or VA refinance, both of which have eligibility guidelines. Even so, conventional cash-out refinances still have income and credit score requirements.