Refinance
Cash-out refinance loans
Useful for a rehab or a debt payoff. Rarely useful for anything else.
What a Cash-out refinance loan actually is
A cash-out refinance replaces your mortgage with a larger one and hands you the difference. On a one-unit primary residence we can go to 80% of appraised value, 75% on two to four units and on investment properties. Above that there is no conventional cash-out market at any price.
The two uses that consistently hold up are a renovation that adds more value than it costs, and consolidating genuinely expensive debt. What does not hold up is trading a 4% first mortgage for a 6.5% one to fund something you could pay for another way. When a HELOC or a second lien leaves your first mortgage alone and costs less over the period you actually need the money, we will recommend that instead.
Best suited to
- Renovations where the work adds more value than it costs
- Consolidating high-rate unsecured debt when the arithmetic genuinely works
- Recovering cash after an all-cash purchase within six months
- Owners whose current rate is already at or above today's market
What comes with the loan
- Side-by-side comparison of cash-out against a HELOC and a fixed second lien over your real time horizon
- Blended rate calculation so you can see what the money actually costs once both loans are counted
- Debt consolidation analysis with payoff letters ordered and verified
- Renovation scope review where the cash funds work, including whether a 203(k) would be cheaper
- Delayed financing structuring if you bought the property for cash within the last six months
- Written statement of the pricing adjustment your loan-to-value and score trigger
How a file moves
- 01
Is this the right instrument?
We model cash-out against a HELOC and a fixed second. On a low-rate first mortgage the answer is very often the second lien.
- 02
Value first
Everything depends on the appraised value. We pull comparable sales before ordering so you know whether 80% gets you where you need to be.
- 03
Underwriting
Cash-out files get more scrutiny of the use of funds, particularly on investment property. Payoff letters must match the disclosed debts.
- 04
Closing
Three business day rescission on a primary residence. Funds disburse on the fourth business day, by wire or check.
- 05
After
If the money funded a renovation, we schedule a value check in twelve months to see whether a PMI removal or a smaller balance refinance now makes sense.
Why borrowers choose it
One payment, one lien
Where rates justify it, consolidating a first and a second into a single fixed payment simplifies everything.
Fixed for the full term
Unlike a HELOC tied to Prime, a cash-out refinance fixes the rate on the whole balance.
Delayed financing
Bought with cash in the last six months? Recover your funds without the twelve-month seasoning wait.
Honest alternatives
We will recommend a HELOC or a second lien when it costs you less. That advice has cost us revenue and kept clients.
What to watch out for
- Trading a low first-mortgage rate for a higher one on the whole balance is expensive, even at a lower payment.
- Cash-out pricing adjustments can reach 1.500% in points at 80% LTV with a moderate score.
- Consolidating unsecured debt converts it into debt secured by your home.
Cash-out refinance questions we get asked
Still unclear? Call (215) 555-0145 and ask for the originator covering your county.
All questionsUp to 80% of the appraised value on a one-unit primary residence, less the existing balance and closing costs. On a $500,000 home with a $250,000 balance that is roughly $150,000 before costs. Two to four unit and investment properties cap at 75%.
Often, if your first mortgage rate is well below today's market or you need the money for a defined period. A HELOC leaves the first mortgage alone and charges interest only on what you draw. We model both and give you the blended cost over your actual time horizon.
An agency exception that lets you take cash out within six months of an all-cash purchase, up to the lesser of the purchase price or current value, without waiting out the normal twelve-month seasoning. Documentation of the original cash source is required.
Yes. Cash-out carries a loan-level price adjustment that varies with loan-to-value and credit score, typically 0.375% to 1.500% expressed in points. We state your exact adjustment in writing rather than burying it in the rate.
Programs worth comparing
HELOC
Ten-year draw at Prime plus margin, interest only on what you use
Home equity loan
Fixed-rate second lien, 5 to 20 year terms
Rate and term refinance
Lower the rate, shorten the term, or drop mortgage insurance
Find out if Cash-out refinance fits
Fifteen minutes, a soft credit pull, and a straight answer about which program actually suits your file.
No application fee. Soft credit pull at pre-qualification. Flat $1,095 origination at closing.