What is Cash out refinance?
Often times, there is large equity built up in your home. You may want to cash out on some of that equity, but you don’t want to do it from a home equity line of credit because the rate usually changes with Prime and it could go much higher down the road. Maybe you want to buy a nice car, remodel your home, pay off other debts/property tax, or landscape your yard, and you want to pay for it with a fixed rate along with your home, spread over 15 or 30 years.
With cash out refinance, we combine your current mortgage with the amount you want to cash out, and refinance it into one bigger loan, just like a normal refinance except the loan amount is bigger than your current loan balance. You get the extra cash after close of escrow and you can spend it on whatever your plan was.