A cash out refinance can help your home improvement goals, so you don’t have to rely on credit cards, a personal loan or a second mortgage. You can also use the money to cover repair bills, consolidate or pay off debt or eliminate student loans.
What is a Cash Out Refinance?
A cash-out refinance is the process of replacing your existing mortgage with a larger one. The difference between the new loan amount and the existing balance goes to you to you at closing.
Unlike a second mortgage, a cash out refinance doesn’t add another payment to your list of bills. Cash out refinances give you access to lower interest rates than other lending options, including credit cards.
What is required for Cash Out Refinance?
To qualify for a conventional loan, all loan applicants must meet certain requirements, including:
- Good work history
- Verifiable income
- Credit score of 620+
- Minimum equity for loan program
How much can you get with a Cash Out Refinance?
The amount you can borrow depends on your home’s value and loan program. With conventional loans, the maximum amount you can borrow is 80% of the home’s current market value. FHA is the same as conventional while VA allows you to borrow up to 100% of your home’s current market value.
This Cash Out Refinance Calculator will help you determine how much you can borrow, your new monthly mortgage payment, and whether a cash-out refinance is right for you.
Cash Out Refinance Example
Let’s say you still owe $100,000 on your home, and it’s currently worth $400,000. This means that you have $300,000 in equity. For a cash-out refinance, you are typically required to maintain at least 20% equity in the home. So, for this example, you need to keep $80,000 in equity, leaving you with up to $220,000 to take out.
Ready to get started?
If you are interested in learning more about cash out refinance loans, we are here to answer all of your questions. We will walk through the numbers and the process, from application to closing.
Complete our Quote Request below or call us at 404-303-7411 to take the first step.
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