Cash-out refinancing lets you turn a portion of your home’s equity into money you can use however you want. It can be a solution to finally paying off credit cards, consolidating debt, affording college or remodeling your home.
How does it work?
Equity is the difference between your home’s value and how much you owe on your loan. With cash-out refinancing you can receive a portion of your equity in cash.
If your home’s value is
And you still owe
Your equity equals
Cash-out refinancing would allow you to take a portion of your $200,000 equity in cash.
For example, if you choose to take $50,000 of this equity in cash, your refinanced mortgage will look like this:
Remember, your new loan will be greater than your current loan. However it’s not uncommon for borrowers to receive a lower interest rate, or a shorter term.
Equity you turned into cash:
Plus what you still owe:
Your new mortgage:
You can use the money however you like.
The cash-out option is a great way to cover the costs of expected or unexpected life events, and any other personal or financial needs you might have.
Pay down or pay off high-interest credit card debt
Consolidate multiple home loans into a single payment at a lower rate
Pay off auto loans or other debt
Cover college or other education expenses
Remodel or renovate a home
Take care of health related expenses
Make real estate or other investments
Accommodate a growing family, divorce or other life events
In accordance with Section 326 of the USA PATRIOT Act of 2001, Equity Smart Home Loans is required to obtain a copy of the documents used in identifying our new account customers. This notice is being provided to you for adequate notice given under this act.