Cash out Refinance
One of a homeowner’s greatest assets is home equity. Borrowers who are refinancing can tap into this equity through a cash out refinance. This mortgage option represents an affordable way to borrow using the equity the borrower already has in the home, turning it into cash to be used for existing financial needs.
In a cash out refinance, the borrower applies for a loan for a value higher than what is currently owed on the home. For example, if a home is worth $400,000, and a borrower owes $200,000 on the existing mortgage, that individual could borrow $250,000 to receive $50,000 in cash. The lender gives this money to the homeowner at the closing on the new mortgage in a lump sum payment. The money is then repaid over the lifetime of the new loan, rather than through a separate payment for a second mortgage or loan product. Homeowners who have significant equity may choose this option to fund future investments, take a vacation, purchase a high-cost item, fund college expenses for their children, pay off debt with high rates or make improvements to their homes.
If you need a large sum of money and have built up equity in your home, talk to one of our home loan specialists about the possibility of a cash out refinance. Take advantage of today’s low mortgage interest rates to find an affordable source of funding for your upcoming financial need. Whether you need a way to send the kids to college or simply want to make some repairs around your home, refinancing could provide the solution you need and we are here to help.