What’s Cash-Out Refinance and How It Works
Texas Commercial Loan Financing A cash-out refinance is a type of mortgage refinancing that enables you to cash out your home equity. Your prior mortgage balance is exceeded by the amount of the new mortgage, and the excess is paid to you in cash. Refinancing is a common practice used to replace an existing mortgage with a new one in the real estate industry. The new mortgage often offers the borrower more favorable conditions. By refinancing a mortgage, you may be able to reduce your monthly mortgage payments, negotiate a lower interest rate, renegotiate the periodic loan conditions, remove or add borrowers from the loan obligation, and, in the case of a cash-out refinance, access cash from the equity in your house. Example of a Cash-Out Refinance: Consider a scenario in which you borrowed $200,000 to purchase a $300,000 piece of property, but you are still in debt by $100,000. You have also accrued home equity of at least $200,000, assuming that the property value has not fallen b