Take advantage of the equity in your home with a cash-out refinance and use the cash from your home equity to pay for life’s big expenses.
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Your Home Equity in Your Hands
Property values have recently skyrocketed, which means that you are likely sitting on a lot of untapped equity that you can use to consolidate high interest debts, pay for renovations, fund college tuitions, or pay for a wedding. A Cash-Out Refinance from Newfi offers you the relief you’re looking for, without needing to take out any high-interest credit cards or personal loans.
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What is a Cash Out Refinance?
A Cash-Out Refinance is a mortgage refinance option that allows borrowers to refinance their home while also accessing their equity. With a Cash-Out Refinance, borrowers take a new mortgage out on their home that replaces their current mortgage, and in that process, are able to pull equity from their home to pay for expenses. The “Cash-Out” you receive is the difference between what you owed on your original mortgage and what your home is currently valued at according to an appraisal.
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How Does a Cash-Out Refinance Work?
A Cash-Out Refinance is a mortgage loan–with a new loan term, interest rate and a higher principal loan balance–borrowers can take out that entirely replaces their existing mortgage. To determine how much equity you have in your home, lenders require an appraisal. The maximum cash-out you receive is determined by taking what you owed on your original mortgage and subtracting it from the appraised value of your home.
Frequently Asked Questions
What’s the Difference Between a Cash-Out Refinance and a Second Mortgage?
With a Cash Out Refinance, borrowers refinance their existing mortgage for a brand new mortgage that has its own loan terms and interest rates. The owed balance on the new mortgage will also likely be higher based on the appraisal that was done to qualify you.
How Much of My Equity Can I Use?
The amount of cash you can pull out of your home’s equity will depend on a number of factors including the appraised value of your home or the loan-to-value (LTV), debt-to-income (DTI) ratio, credit score, and a variety of other factors.
Do Cash-Out Refinances Have Closing Costs?
Cash-Out Refi’s do have closing costs associated with them. These costs are typically 3-6% of the mortgage loan. However, in some instances, you may be able to close on your refinance with no out-of-pocket costs, and instead finance the closing costs.
What are Current Cash-Out Refinance Rates?
Your exact Cash-Out Refinance rates will depend on the mortgage you choose, the rate you qualify for and the terms you select. Contact us to review your options and calculate your payments.
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