Cash Out Refinance Explained | Find The Perfect Loan


Cash out refinances can be great for someone
who needs extra money for a home renovation, or to pay off some
higher interest debt. like a normal refininance, you’re replacing
your current mortgage with a new one, possibly at a lower rate. But unlike a standard refinance, you expand the
loan amount and get the difference in cash. This differs from a home equity loan, or a home
equity line of credit because instead of having a second mortgage,
it’s all rolled into one loan. Because cash out refinances don’t only
need to be used for home renovations, they can be a great option over other
renovation refinanaces, such as 203k’s, if you have the equity. Now let’s talk about requirements. Cash out refinanaces can’t exceed 80% of the
loan-to-value of your home. That means that if your home is appraised
for $250,000, The most you could get the loan for
is $200,000. If, in that circumstance, you only owed
$100,000 on the house, you could take the remaining $100,000 of
equity out through a cash out refinance. In order to qualify for a cash out refinance,
you also must have a credit score of at least 620, and a debt-to-income
ratio under 45%. There’s also an updated home appraisal needed
in order to qualify for a cash out refinance. So to sum it all up, cash out refinances can be
a great option for anyone looking to make home improvements, pay down higher
interest debt, or even reinvest their money. To learn more about cash out refinances,
and for other mortgage resources, visit totalmortgage.com

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