What is a Cash-Out Refinance? - Better Lending

What is a Cash-Out Refinance?

What is a Cash-Out Refinance?

In the last year the number of people refinancing their homes has skyrocketed due to records lows of the national interest rate, but do people know about a cash-out refinance? You might be asking yourself what is a cash-out refinance? How do I qualify? Well, here is our Better Lending breakdown.

In laymen’s terms, the definition of a cash-out refinance is when you take out a new home loan for more money than you own on your current loan, for example, say your home is worth 500,000 and you still owe 400,000 you would have 100,000 in equity. Depending on your situation the cash-out refinance loan would allow you to take up to 80% of the value of the home. The reason many people decide to do this is to be able to pay off other existing debts with a better interest rate than say a credit card or a car loan. You can also use the money towards home improvements, many people will use the equity and make renovations to their home which would improve the value of the home even more! If this sparked your interest, make sure you read our blog about refinancing your home.

The difference between a Rate-and-term refinance is you are exchanging the current loan for one with better terms, for example, the interest rate. With interest rates being at historical lows and home values being at a historic high it might be the perfect time to think about doing a cash-out refinance. Here at Better Lending, we can help you with all of your mortgage needs! Tune in next week Wednesday to learn about what goes into appraising your home!

Contact Us

  • This field is for validation purposes and should be left unchanged.

Latest Posts

What is Escrow?

What Is Escrow?

March 2, 2022

Escrow is something that can benefit the homeowner, home buyer, and seller as well. However, it doesn’t always apply to every situation.

First Time Home Buyer Checklist

First Time Home Buyer Checklist

February 16, 2022

Better Lending has a couple of tricks and tips to make the purchasing process a little easier for first time home buyers.

Where are people moving 2022?

Where are people moving to in 2022?

February 2, 2022

With 40% of remote workers staying on a hybrid schedule for the 2022 year, we will see more people move to a state they have never lived in.

Twitter Header