Loan Program
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger loan and returns the difference to you in cash at closing. With the equity many longtime Downriver owners have built, it is a common way to fund a kitchen remodel, a new roof, or to consolidate higher-interest debt into one payment.
What it is
- A new first mortgage larger than the balance being paid off.
- The difference, minus closing costs, comes to you as cash.
- Available on conventional, FHA and VA programs with different limits.
Who it's for
- Owners with substantial equity and a clear use for the funds.
- Homeowners consolidating higher-interest balances.
- Owners funding renovations on an older Downriver home.
Typical requirements
- Equity remaining after the new loan, based on program limits.
- Qualifying credit and documented income.
- A full appraisal in most cases.
Guidelines vary by lender and change over time. Meeting these items does not guarantee approval, and all loans are subject to credit and property approval.
Advantages
- One mortgage payment instead of several separate balances.
- Funds can be used for nearly any purpose.
- Mortgage terms are usually longer than consumer debt terms.
Trade-offs
- You are borrowing against your home, which is collateral.
- The new loan may carry a higher rate than the loan being replaced.
- Spreading short-term debt over 30 years can raise total interest paid.
FAQ
Cash-Out Refinance: common questions
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