Thursday, October 18, 2007

What is Cash-out Refinance?

Do you know that you can take cash out from the equity that you have built up on your home loan? Yes, you can. This can be explained easily with a scenario.

Consider that you have a home loan for $200000. If your home is worth $250000 then you can use that to draw cash by refinancing your home loan. You can refinance for, say $220000 and get a cash of $20000 from the lender upon closing your existing home loan.

You can refinance to any value between $200K and $250K and take the amount that is excess of $200K. People who need money immediately for some other purpose can use this method to get the cash needed.

In the case of home equity you can take a refinance loan for the amount that you need without changing the original mortgage.

There are many websites in the internet that help you compare the home equity loans and the cash-out refinancing option. A simple search on the Internet would give you access to these tools that might be very useful to you. Alternatively you can discuss with an expert to get the right picture about these options.

No comments: