Last Updated on September 6th, 2022. Original: September 6th, 2022
Cash-out refinancing lets you access your home equity through a first mortgage instead of through a second mortgage, like a home equity loan or line of credit. You will need to have 15% to 20% equity left after the refinance. With current home prices in the Inland Empire, most homeowners will qualify. Keeping at least 20% equity will avoid paying any mortgage insurance. Homeowners throughout all of California may be eligible to cash-out through a mortgage refinance.
There are several benefits to accessing your home equity through a refinance, home equity line or closed-end second through your local Inland Empire mortgage lender. These include having the money available for whatever purpose you want. If you have an emergency, you can access the funds. You can use the money for any purpose, including a new car, paying off credit cards, or paying down high-interest debt. You may even want to reduce the time to pay off your home loan while getting cash out in order to save years in interest.
Most of us don’t know how much equity we have in our homes. If we do a quick search online, we might find that you may have thousands of dollars in equity. To avoid mortgage insurance, homeowners need at least 20% equity left after getting cash proceeds. For example, this means the homeowner wishing to refinance may be able to take a $320,000 new loan (including current loan payoff and cash) on a $400,000 appraised value or a $480,000 new loan (including current loan payoff and cash) on a $600,000 home. A+ Home Loans can assess what you can receive on a cash-out refinance as well as review the best program options to fit your needs.
Refinancing a home can be an excellent way to boost your savings account, especially in a recession when you have built up equity in your home. Cash-out refinancing allows you to access the money you have put into your home as equity, letting you pay off any debt you may have. Once you pay off your debt, you can have the cash you need to buy that nice RV or pay for college tuition. In cases where you may not want to give up your current low-rate home loan you can still get access to equity without refinancing by taking out a home equity line or closed-end second mortgage.
Borrowers do not have to have excellent credit to be eligible for cash-out refinancing. However, if you have excellent credit, you will have access to the best available rates.
Cash-out refinances can be a good way to access your home equity and re-organize your finances without having to go through the process of selling your home. If you’re interested in how a cash-out refinance may benefit you or have questions on how much cash you can take out of your home, contact A+ Home Loans.