With a cash-out refinance, you refinance your mortgage for more than you currently owe. You take the difference in cash from your new loan and your new mortgage balance will be greater than your current mortgage.
Most of our customers who choose a cash-out refinance turn their home’s equity into money they can use however they want. It helps our customers achieve certain financial or life goals such as home renovations, paying off auto loans, major purchases, health care expenses, investments, life events, vacations, or home improvements. Cash-out refinances can also be a cash flow strategy when rates are low and markets are bull or bear.
To turn equity into cash our experts determine what you owe, what your home's value is, and the difference between those two figures.
If your home's value is: $800,000
And your balance is: $300,000
Then your equity is: $500,000
In the example above you can receive an allocation of the $500,000 in cash. And you can use that cash however you like.
Home equity loans are second mortgages that can be more risky and have a higher-interest rate. A cash-out refinance can help prevent overextending your credit utilization and pay less in interest while mortgage rates are at historical lows.
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