Cash-Out Mortgage Option
A cash-out mortgage option is when you borrow more money than what you currently owe on your mortgage. For example, if you owe $200,000.00 on your loan, and you borrow $250,000.00, then this would be considered a cash-out refinance transaction. In this example, you would pocket the difference between the existing mortgage amount and the new mortgage amount (i.e., $50,000.)
Because the interest rates on a mortgage are lower than other types of debt, using the equity in your property to consolidate your debt can save you thousands of dollars a month.
Cash-out refinances are considered a higher risk loan. Therefore, underwriting guidelines and loan limits are stricter when you pull cash-out. The most restrictive requirements of a cash-out transaction are the lower loan-to-value limits and the need for a higher credit score. The quickest way to determine if you qualify for a cash-out refinance is to speak with one of our licensed mortgage professionals.
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