Cash-out refinance
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash at closing. You borrow against the equity you have built, usually at a mortgage rate rather than a credit card or personal loan rate.
Who it's for
- Homeowners with meaningful equity
- Owners planning a renovation
- Borrowers consolidating higher-interest debt
What you'll typically need
- Enough equity after the new loan (often up to about 80% loan-to-value)
- Credit and income that meet the program's guidelines
- An appraisal of the current value
- A clear plan for the funds
Guidelines vary by lender and change over time. A licensed loan officer confirms what applies to you.
The good
- One payment instead of several
- Usually a lower rate than unsecured debt
- Funds for projects that add value
Trade-offs to know
- Closing costs apply
- You owe more on your home
- Stretching short-term debt over 30 years can cost more in total
Step by step
- 01Equity and goals review
- 02Rate and cost comparison
- 03Appraisal
- 04Underwriting
- 05Funding (after any rescission period)
Other programs
Rate-and-term refinanceCash-out refinanceFHA streamlinePurchase loans
On a real site each program gets its own page like this one.
Talk it through with Avery Stroud
Questions are free. So is a first look at your numbers.
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