Cash Out Refinance

Did you know that U.S. home prices increased by more than 6% during 2017? According to mortgage experts, Black Knight, there is “$5.4 trillion in total tappable equity”, which is 10% more than the previous peak in 2004. Increasing home values now offers many households an opportunity to improve their financial situation through a cash-out. If you need money to improve your financial situation, including home improvements, consolidate debt, or pay for college expenses and have equity in your home, then consider a cash-out mortgage.

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What is A Cash Out Refinance

A cash-out mortgage combines a traditional (rate/term) refinance with an additional sum above your current mortgage balance. Instead of taking out a second mortgage (either a Home Equity Loan or a Home Equity Line of Credit) you take out one mortgage that pays off your existing loan and leaves you with money in the bank.

Home Equity LTV Example

The most significant factor that affects your home equity is the housing market. Rising home prices lead directly to an increase in home equity. One way of tapping into the wealth and fixing one mortgage payment for all of you home loans is to take out a cash-out mortgage.

How Does a Cash Out Refinance Work?

How can you take out more money than you owe? A cash-out mortgage is based on the amount of equity you in your home. Mortgage lenders use a loan to value ratio (LTV) to determine how much cash you can take out. A purchase mortgage or a standard refinance mortgage is capped at about 95-97% of your home value. However, a cash-out mortgage is limited to 80% on a conforming loan for a single unit primary residence.

Do you Need Excellent Credit? In addition to the LTV, mortgage, lenders will look at your credit history, credit score, qualifying income, and debt to income ratio (DTI). The most popular cash-out mortgages today are conforming loans backed by Fannie Mae and Freddie Mac, which require a minimum score of 620; However, you may be surprised to know, but you can qualify with less than good credit scores from lenders who are offering non-QM cash-out mortgages.

Get a Cash-Out Mortgage Refinance Quote

Do you have equity in your home? Can you lower your interest rate? Or are you looking for payment relief?. Get a cash-out quote now.

Bills.com Cash Out Mortgage Calculator

Do you have equity in your home? Do you need cash to consolidate debt, make home improvements, or pay for college expenses? Use Bills.com's Cash Out Refinance Calculator and find out how much you can borrow and your monthly payments.

How Much Equity Do I Have In My Home?

Your home equity depends on the value of your home and your mortgage balance. If you have more than one mortgage, then use the total amount for your “Mortgage Balance.” The result box shows both your Loan to Value ratio (LTV) and the total amount of equity, in dollars, you have based on current values.

Mortgage Balance

Home Value

LTV

(Loan to Value Ratio)

My Equity is Now:

How Much Cash Can I Take Out?

After completing step one you have a good idea of how much equity you have in your home. However, the amount of cash you can take out of your home depends on lenders underwriting rules. In general, lenders offer up a LTV up to 80%, although some lenders do offer higher ratios.

Maximum LTV on Cash-Out Refinance Mortgage

Maximum Cash Available Is:

How Much is My Current Monthly Mortgage Payment?

Your current monthly payment (principal and interest) is based on your mortgage balance (see step 1), the number of years left to pay, and your current interest rate. If you have mortgage insurance, then you will need to add this to your overall calculation. We recommend that you contact us for further advice.

Number of Years Left to Pay

Interest Rate on Existing Mortgage

Existing Mortgage Payment Is:

Calculate Your New Cash-Out Mortgage Payment

Figure Out How Much Your Payment will be based on current mortgage rates, the length of the new loan, and the amount you wish to add to your current mortgage

Amount of Cash to Add to Current Mortgage

Loan Term Years
 (New Loan)

New Interest Rate New Interest Rate

Your New Cash-Out Mortgage Payment Will Be:

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Cash-out Mortgage Alternatives

Cash-Out or Home Equity Loan?
A cash-out is not necessarily the best solution for your financial situation? If you currently have a mortgage at a rate and you can afford high monthly payments, then consider a home equity loan (HEL) or a home equity line of credit (HELOC). The new interest rate will only apply to the new smaller mortgage and you save on lower closing costs.

If you cannot qualify for a cash-out mortgage, or the payments do not fit your budget, then check for other solutions. If, for example, you are looking to consolidate debt, then check out bills.com Debt Navigator for a personalized debt solution.

Get a Cash-out Mortgage Quote Now

Do you have equity in your home? Can you lower your interest rate? Or are you looking for payment relief?. Get a cash-out mortgage quote now.

Why Take Out a Cash Out Mortgage? Major Reasons

Bills.com recommends that you consider taking out cash from your home in a manner that best improves your financial situation. The most important reasons to take out a cash-out refinance are Debt Consolidation, Home Improvements, and Home Repairs, Finance College Expenses, and Pay Big Bills.

Reason to take out a cash-out A cash-out can significantly improve your lifestyle. Maybe you accumulated debt? Cash-out mortgage debt consolidation is a great way to get a reduced interest rate and affordable monthly payments. Did you push off essential repairs? A cash-out refinance can let you complete home repairs such as a new roof, new flooring, or badly needed appliances.

One thing to keep in mind: Don’t use the money frivolously. A cash-out mortgage is not a gift. Consider your overall financial situation. Do you want cash for an expensive vacation? In general, it is a bad idea to finance consumption items using a long-term loan.

Learn More About Cash-out Refinance Mortgages

Do you need extra cash? Maybe you are considering a debt consolidation loan? Get more information about cash-out mortgages.

Cash-Out Refinance 2018

Learn about cash-out mortgage trends in 2018. A combination of rising home prices, increasing incomes, and attractive but higher mortgage rates make for both opportunity and a need to carefully analyze the situation. Maybe you can benefit from a cash-out refinance? Get more information about the latest trends.

Arizona Cash-Out Refinance

Arizona home prices plunged in the 2007-2008 housing crisis. Home prices in many areas of Arizona rebounded, giving homeowners stronger equity positions. It is now possible to take a cash-out refinance and lower interest and/or lower your monthly payment. Check out examples from the Pheonix area.