yes...the line of credit makes this now a cash out transaction when you refinance.
even if I havent used the line of credit in over a year it's still considered cashout?? I thought if it hadnt been used over the past 12 months it wasnt considered cash out? Am I wrong or was this recently changed?? Thanks for your helP!
a cash out refinance is when you refinance your first mortgage and received cash using the equity, which is the difference between the market value of your house less what you owe. however, when you first purchased your property and after a couple of weeks/months you applied for another loan using the equity, it's called equity line of credit or in short, second mortgage. it's not refinancing. not using your line of credit (loc) within a certain period of time (2 years) might trigger the bank to cancel it. check with your bank if it's still active.
If a borrower chooses to take cash-out in addition to their existing loan balance, the new loan balance will consist of the current loan balance plus the desired cash-out amount. This type of refinance is referred to as a “cash-out refinanceâ€
There are two ways a borrower can execute a cash-out refinance
. They can either open up a home equity line of credit, also known as a Heloc, behind their existing first mortgage, or refinance their existing mortgage into one or two loans.
There are two ways a borrower can execute a cash-out refinance
. They can either open up a home equity line of credit, also known as a Heloc, behind their existing first mortgage, or refinance their existing mortgage into one or two loans.