Cash-Out Refinance

Looking to take advantage of the cash-out refinance option on your home? Have no fear, Gold Star Mortgage can help you!

Cash-out refinancing typically is a result of a homeowner wishing to capitalize on low interest rates by “cashing out”. This can be done by refinancing an existing mortgage, as well as consolidating a prior mortgage.

Cash-out refinancing takes place when the total amount a homeowner refinances their property for is more than what they owe, which leads to the homeowner receiving a cash payment of the difference. The cash-out refinance is a popular option for homeowners who aspire to make renovations to their home or need funding for other costs and expenses.

Perhaps the most prominent deficiency with cash-out refinancing is a homeowner’s prior-built equity is taken away. This leads to the homeowner owning less of their home, as well as having to re-start the elongated process of building equity.

Even if a homeowner lacks advantageous rates, a cash-out refinance is still a possibility. The main objective is to add a second mortgage to their original mortgage that does not affect interest rates. It is advised to homeowners that they do not touch a mortgage close to being paid in full, as homeowners are better off extracting cash through their second mortgage. Rental properties are usually sufficient use for cash-out refinancing, as they typically have lower LTV limits.

Although a homeowner can cash-out at a time of their choosing, lenders usually prefer a homeowner to be in a home for at least one year. There are various lenders who allow a cash-out of up to 75% LTV for homeowners who have owned their homes for less than year, yet it is considerably rare for a homeowner to have an equity percentage of 25% when looking to cash-out shortly after buying a home.

Preferring a homeowner be on their property for a year is not the only desire lenders have for homeowners looking to obtain cash-out refinancing, as there are limits on the total amount a homeowner can acquire. Lenders typically impose an 85% LTV limit on cash-out refinance loans.

The capital given via cash-out refinancing is tax-deductible at a limit of $100,000. Gold Star Mortgage can also assist Veterans with cash-out refinance loans! Funding can be secured for paying off debts, property enhancement expenses and education costs.

Contact Gold Star Mortgage today at (925) 930-7870 to get started on your cash-out refinance loan!