Charlie Edler, a licensed Mortgage Expert at Better Mortgage, gives an intro to cash-out refinances and when you might (or might not) want to consider one.
Let’s get straight to it: a cash-out refinance basically lets you take cash straight from the equity in your home. So how does it work? In a nutshell, you refinance your current mortgage for more than what you owe and keep the difference in cash. You’ll get a new loan that consists of your previous mortgage balance plus the cash you took out.
Here’s an example: let’s say your house is worth $300,000 and you have $100,000 left on your current mortgage. That means you have $200,000 in home equity. If you wanted to liquidate $30,000 of this equity, you would then get a new loan worth $130,000 (the $100,000 balance from your original mortgage balance plus the $30,000 you took out in cash).
See today’s cash-out
This article was originally published on Better.com
Thank you,
Glenda, Charlie and David Cates
