Cash-out Loans

Cash-out Loans

We offer many option for cash-out loans. If you have built equity in the property. You have many options to takeout money. You can use this many to pay off your credit cards , car loans or use it to fix the property.

A cash-out refinance is a refinancing of an existing mortgage loan, where the new mortgage loan is for a larger amount than the existing mortgage loan, and you (the borrower) get the difference between the two loans in cash. Basically, homeowners do cash-out refinances so they can turn some of the equity they’ve built up in their home into cash.

Here’s an example to illustrate: Let’s say you own a $300,000 house and still owe $200,000 on the current mortgage. (This means you’ve built up $100,000 in equity – a fancy word for ownership). Now let’s say you want some extra cash to the tune of $30,000. You could do a cash-out refinance to get this money. If you did this, you’d get a new loan worth a total of $230,000 (the $200,000 you still owe on your home, plus the $30,000 you’re going to take out in cash).

One of the big drawbacks of a cash-out refinance is that you pay closing costs on the entire loan amount. So if you owe $150,000 on your mortgage and use a cash-out refinance to borrow another $50,000, you’re paying closing costs of 3-6 percent on the entire $200,000.

For this reason, a cash-out refinance works best if you can also reduce your overall mortgage rate or if you wish to borrow a large sum. For smaller amounts, a home equity loan or line of credit (HELOC) may be a better choice.

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