Welcome to your gateway to smarter, more flexible financial solutions. If you're a property owner, your property isn't just a place to live – it's a key to unlocking a wealth of possibilities. With a Cash-Out Refinance, you can tap into your home's equity and reshape your financial future.
What Is a rate & term Refinance?
A cash-out refinance is a type of mortgage refinancing option where a homeowner obtains a new mortgage that is larger than their existing one, and in the process, accesses the equity built up in their home. This option allows homeowners to refinance their mortgage for more than they currently owe and then receive the difference in cash.
Here's a breakdown of how it works:
Home Equity:
Over time, as you pay down your mortgage and/or as the value of your home increases, you build equity in your property. Equity is the portion of your property that you truly "own" – it's the difference between the current value of your home and the amount you owe on your mortgage.
New Mortgage:
In a cash-out refinance, you take out a new mortgage for a greater amount than what you currently owe on your home. This new mortgage pays off your old mortgage.
Receiving Cash:
The difference between the new loan amount and your existing mortgage balance is given to you in cash (check or wire) or is used to pay off existing liens. This cash can be used for various purposes, such as home improvements, paying off debts, funding education, or investing in other properties.
Repayment:
You then repay the new mortgage over time, just like your original mortgage. This new loan typically has different terms, including possibly a different interest rate, loan term, and monthly payment amount.
Flex Term :
This refers to changing the length of your loan. Choose your term between 8-30 years. For example, if you originally had a 30-year mortgage, you might refinance to a 19-year term. Shortening your term can lead to higher monthly payments, but you'll pay off your mortgage faster and save significantly on interest. Conversely, extending your term can lower monthly payments but increase the total interest paid over time.
Common Rate & Term Uses
Change Your Loan Term:
Shorten Your Term: Accelerate your path to being mortgage-free! Refinancing to a shorter term often means paying less interest over the life of your loan.
Extend Your Term: Lower monthly payments by spreading them over a longer period. Ideal for easing your monthly financial burden.
Remove Mortgage Insurance:
If you've built up enough equity in your home, refinancing can reduce the cost of or eliminate the need for Private Mortgage Insurance (PMI), reducing your monthly outgoings.
Pay Off Construction/Renovation debt:
Get rid of that construction loan and take on a new loan that’s tailored for you.
Remove a Current Owner:
Life changes, and so do ownership needs. Refinancing can help in removing a co-borrower or former spouse from the mortgage, simplifying your property's ownership.
Pay Off High-Interest Debts:
Consolidate your debts, such as credit cards or student loans, into one low-interest monthly payment, reducing financial stress and simplifying your life.
Invest in Another Property:
Use your home equity to put a down payment on an investment property, expanding your real estate portfolio and generating additional income.
Fund Major Expenses:
Whether it's financing your child's education, renovating your home, or making other significant investments, a Cash-Out Refinance provides the funds you need to make it happen.
Whether you're aiming to change your loan term, eliminate mortgage insurance, tackle student loan debt, remove a name from your mortgage, or simply lower your monthly payments, we're here to guide you through each step.
Is It Right for You?
Every homeowner's situation is unique, and the decision to opt for a Cash-Out Refinance depends on various factors, including your current mortgage terms, the amount of equity in your home, and your overall financial goals.