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litisham · Joined: 23 Jun 2009 Posts: 116 -0.62 Dollars($)

What is a cash-out refinance?

Realgeni · Joined: 13 Apr 2009 Posts: 1434 99.76 Dollars($)

litisham

Once your refinance, you will take otu soem cash in addition to refinancing yoru house. This is possible if you have enough equity in the property

Good luck and feel free to ask

merry809 · Joined: 10 Aug 2009 Posts: 35 0.02 Dollars($)

It is transaction of refinance of your loan by some additional loan which also provides you some cash as it closed the primary loan.

This is very useful to closing primary loan and using addtional cash as you are getting from this type of loan.

By cash out refinance you do not get higher interest.

Cash out refinance is used to consolidate multiple expenses or debts in single monthly payment. It reduces efforts and save more cash.
Anyone can use credit cards as cashout refinancing purpose.

Cashout use for equity of home on issued like education or car loan without having until sell your home.Home equity loan is not the same as a cash-out refinance. Cashout replaces home loan and does not come on top of it.

merry809 · Joined: 10 Aug 2009 Posts: 35 0.02 Dollars($)

Any on can allowed to cash out 125% of apprised value with higher interest and its depends on the lender.
You may consider it as investment. This is another way that a cash-out comes handy - use it as active investment instead of having this money stuck in the house.

Jimmymackin · Joined: 17 Aug 2009 Posts: 66 0.65 Dollars($)

Merry,

You are providing a lot of misinformation in regards to cash-out refinance. First off, you absolutely cannot borrower up to 125% of the value of your home...you are confusing this with the new Refi Plus program, which is a completely different program only used for Rate/Term Refinances.....there are several articles and post about this topic.

Just because you can take the cash out of your property does not mean you should... A big part in today's housing crisis is you have borrower's who pulled all the equity out of their properties to start high risk business, or take part in other risky investments... It is important to understand that a cash out refinance does NOT pay off your debt, it simply restructures your debt. You are taking short term installment loans and credit cards and transfer them to long term mortgage....It can in fact be very beneficial if you are saving quite a bit of money each money and are able to reestablish your savings account. You will end up paying more in interest then you otherwise would transferring a 3 year car loan into part of a 30 year mortgage.

Here is my opinion;

1. If you can afford to pay off the debt without rolling it into your mortgage, do so
2. If you are paying high interest on your credit cards and auto loans and have the ability to pull the cash out of the property and restructure your debt, look at the difference in monthly payments from where you are now, to what the new loan payment would be.
3. If you do pull cash out to get rid of those credit cards....GET RID of those credit cards! What I saw a lot of in 2003-2006, individuals who were addicted to refinancing. They would rack up the CC, refinance (increase their mortgage payment) and then do it all over again ever 16-24 months.

On a side note, unless you are a Veteran, 85% is the maximum cash out on through an FHA Loan.

jveenstra · Posted: Tue Aug 18, 2009 2:01 pm Post subject: Cash out Refinance

The normal definition of a cash out refinance: If the new mortgage is over $2,000 more than the old mortgage plus closing costs.
In other words, if the new mortgage is less than the old mortgage balance plus closing costs plus $1,999 (that means you take $1,999 home after closing), it is still a rate and term refinance.

Jimmymackin · Joined: 17 Aug 2009 Posts: 66 0.65 Dollars($)

But that is not really accurate. You are referring to the Conventional guidelines above I assume...and it is the lower of 2,000 or 2%...so if it is only a 80,000 mortgage the maximum cash out is 1,600 at closing. Not with some loans, like streamlines, the cash out has to be under 500 if the lender will even allow anything.

Just thought I would add to it

jveenstra · Posted: Tue Aug 18, 2009 2:15 pm Post subject: Cash out

Jimmy,

Good catch. I sit corrected. The lesser of $2,000 or 2% of the mortgage amount is still a rate and term refinance.

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