2006-07-13 13:41:53 · 7 answers · asked by freakquentflyer 1 in Business & Finance ➔ Renting & Real Estate
You are cashing you your equity. For example, your house is worth 200k, your mortgage is 150k currently. You refinance, and the bank/finance company offers you a loan either at 150k or anywhere inbetween 150k and 200k since that's what the house is worth. You can get the loan for 200k, and get 50k back at closing.
2006-07-13 13:46:16 · answer #1 · answered by miketorse 5 · 0⤊ 0⤋
There are some things that have been missed in these previous messages.
First of all, if your loan balance is somewhat below 80% of the value of the home you can refinance and take a new loan for up to 80% of the value of the home. Now this is if you want to just keep one loan but if you decide to go over the 80% of the value of the home you might need a second loan which will have a MUCh higher interest rate.
I DEFINITELY would not suggest you refinance to 100% of the value as others here might have suggested. That is NOT a good idea AT ALL!!
With tha said, in order to get money back on your closing you do the following. Depending on the amount of equity you can refinance for a bigger loan that will cover that equity and you will have that cash in your pocket (without taking into account costs for the refinance).
Good luck
2006-07-14 21:00:43 · answer #2 · answered by SCCRealEstateUNCENSORED.com 3 · 0⤊ 0⤋
You are using your equity in your home. The longer you live there, and pay down your mortgage, and with certain property values on the rise, you have an appraisal done, and if you owe 100,000 on the balance of your Mortgage, and your appraised value is 150,000 (just an example), you could get up to the 150,000 of the appraised value, or you could take out 80 percent (120,000) leave some equity in your home, and pocket the difference. 20,000 (but remember you will have lender fees, closing cost, title, etc. to pay for, so you would actually get 16,000 cash back. (estimate).
Be careful - and don't let alot of ppl pull your credit - ok - the reason is this:
Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
Hope this information helped - Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information
2006-07-13 23:54:06 · answer #3 · answered by W. E 5 · 0⤊ 0⤋
You have two option when refinancing, you can do a cash out refinance and pull out your equity. Which the banks will charge you a higher interest rate. But if your looking to pull out $2000 or 2% which ever is less this is not considered a cash out refinance and you can get a lower interest rate.
2006-07-13 20:49:42 · answer #4 · answered by barraganf2001 2 · 0⤊ 0⤋
Borrow more than the payoff of the old note. You'll get a check at closing.
A few states restrict this, TX in particular is VERY restrictive on real estate loans due to the homestead law there.
2006-07-13 20:45:31 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 0⤋
It means you're cashing out from your built equity
2006-07-13 20:50:46 · answer #6 · answered by maimai 2 · 0⤊ 0⤋
Try this website
http://www.realtyhelpusa.com
2006-07-14 01:08:24 · answer #7 · answered by james 3 · 0⤊ 0⤋