A cash-out refinance replaces your existing mortgage with a new home loan for more than you owe on your house. The difference goes to you in cash and you can spend it on home improvements, debt consolidation or other financial needs. You must have equity built up in your house to use a cash-out refinance.
Cash-out refinancing is a type of mortgage loan that allows homeowners to refinance their existing mortgage for a higher amount than what is currently owed, and then receive the difference in cash. The cash-out portion of the loan is based on the equity that the homeowner has built up in their home, which is the difference between the current market value of the home and the remaining mortgage balance. The homeowner can use the cash for any purpose, such as paying off high-interest debt, funding home renovations, or investing in a business.
Check out the loan guidelines, pros and cons for Cash-Out Refinance loans below.
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