Cash-Out Refinance California
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What type of property are you refinancing?
Single Family
Multifamily
Condominium
Townhouse
How will this property be used?
Primary Residence
Vacation Home
Investment Property
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Excellent 770+
Good 660-719
Avg. 620-659
Below avg. 580-619
Poor <579
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Home Purchase
Refinance
What type of property are you purchasing?
Single Family
Multifamily
Condominium
Townhouse
Are you a first-time home buyer?
Yes
No
How will this property be used?
Primary Residence
Vacation Home
Investment Property
Estimate credit score
Excellent 770+
Good 660-719
Avg. 620-659
Below avg. 580-619
Poor <579
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Summary
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Refinance Your Mortgage with Cash-out
There are situations in life when you need extra money to pay for significant additional expenses that come up. You might need to pay for your child’s college tuition, considerable home improvements or investing money into a new business. Or there is a credit card debt that you need to cover. In this case, a cash-out refinance might be the best option for you.
Cash-out Refinance Options
Conventional cash out is available for homeowners with more than 20% equity on their homes
FHA home refinance with cash out that is available to those who have more than 15% equity on their house
VA cash-out refinance for veterans or active service members. You can check requirements here
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What Is a Cash-out Refinance?
A cash-out refinance is replacing an existing mortgage with a new loan that has more favorable terms and a higher balance. The difference between these two loans is given back to you as cash. This is possible because you as a borrower only owe the original mortgage amount to the lender.
The difference from a traditional refinance, when you receive better terms and lower interest rate, is actually getting money on hand. It is also not a HELOC (home equity line of credit) when you borrow cash using the home-equity as collateral.
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Hours: Monday-Friday 10:00 AM - 5:00 PM
In-Person at LA Office
13317 Ventura Blvd #H, Sherman Oaks, CA 91423
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What are the Benefits of a Cash-out Refinance?
If you are thinking about cash-out refinance in Los Angeles or other cities in California, then call us for a free consultation to know your options. This type of refinancing is an excellent option in some circumstances but will not be beneficial to others. Here are some factors you need to take into consideration before deciding to use a cash-out refinance:
Will you pay more money on your loan in the long run?
Will your monthly payments increase?
Do you have enough equity in your home?
Cash-out Refinance Process
Four easy steps to get your funds
Step 1
Pre-Qualification
Talk to Us to Know Your Options
Step 2
Start a Loan Program
We Shop You Choose
Step 3
Pre-Approval
Get a Loan Approval on the Terms You Want
step 4
Closing
Your Goal is Achieved!
What are the Requirements for a Cash out Refinance?
If you decided to use the option of cash-out refinancing here is the list of documents that you will need to provide:
- Your current address and Social Security number;
- Employment history for the past two years;
- 2 most recent Bank statements;
- 2 Most recent years of W2’s forms;
- 2 Most recent years of Federal tax returns;
- Information about other property owned.
Reasons for Cash-out Refinance
Refinance mortgage with cash out is not a magic pill for every situation. For example, if you want to get some cash to go on an expensive vacation, this might not be the smartest move. But there are valid reasons to take some money out of your home. Here are the most common ones:
- Paying for college education of your children. This is a worthy investment that will bring benefits in the future
- Unforeseen expenses such as a medical emergency
- Paying off high-interest credit cards
- Potential tax-deduction benefit
- Home improvements that will increase the value of your home
Cash-Out Refinance FAQ
What is a cash-out refinance, and how does it work?
A cash-out refinance is when an existing mortgage is replaced with a higher-loan one so that the homeowner receives the difference in cash. For example, if your house is worth $500,000 and you owe $300,000, the strategy at this point could be to refinance above $400,000 and take the additional $100,000 in cash, yet you would still keep some equity in the property. This may be one of the many initiatives to source funds for large expenses, such as home improvements or debt consolidation.
What are the eligibility requirements for a cash-out refinance?
Eligibility requirements include:
- Credit Score: Your score must be around or above 620, which may vary based on the lender.
- Loan-to-Value Ratio: Normally, up to 80% of your home value can be taken, keeping a minimum of 20% equity.
- Stable income: Lenders will review stable income and employment status to ensure your ability to manage the new monthly payment.
What are the advantages of a cash-out refinance over other borrowing options?
- Lower interest rates: Mortgage rates are usually less than personal loan or credit card rates.
- Single monthly payment: Refinance wraps all of your debt into one payment.
- Tax deduction: Mortgage interest may be tax deductible if used for home improvement.
What are some drawbacks to a cash-out refinance?
Borrowers should keep in mind the following disadvantages:
- Closing costs: Refinancing typically involves closing costs, which are generally between 2% and 5% of the loan amount when contracting a new mortgage.
- Longer loan term: Refinancing can extend the term of your mortgage, requiring you to pay more interest over the period.
- Risk of default: Paying other debts using the home’s equity in case of a default is risky because you may lose the house.
How much cash can I get from a cash-out refinance?
The figure varies and is dependent on your home value, your current mortgage balance, and the lender’s loan-to-value guidelines. Most lenders allow a cash-out of 80 percent of your home’s market value. For example, if your home is appraised to be worth $400,000, and you owe $200,000, you can refinance for $320,000 and take $120,000 in cash.
How long does it take to complete a cash-out refinance?
Refinancing usually takes 30 to 45 days from submitting your application to closing. The timeframe may, however, differ based on the availability of appraisers and your financial documentation.
What can I use the cash for after refinancing?
The money you receive can be used in many ways, such as home improvement, sending your child to college, debt consolidation, or creating an emergency fund. Ideally, you should know precisely what you plan to do with the money that will improve the safety of your financial standing.
How can I start the cash-out refinance process?
Start by contacting ID Mortgage Broker at 323-741-5858 or by visiting 13317 Ventura Blvd #H Sherman Oaks, CA 91423. Our professionals will explain your options in full detail and walk you through the entire process. Let us tailor a cash-out refinance solution that fits your needs; contact us today!
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