How soon after you buy a home can you pull cash out?

Question

do you have to have equity or how does that work. Is refinancing and pulling cash out the same. what is the difference?

Answer 1

You need equity in the home to take out a home equity loan. So, they will usually have an appraiser come through the home and inspect it. He/She will do a market analysis against other homes in the neighborhood that sold with similar options. Based on that, they come up with a number for what the house is worth. Then, they look at how much you currently owe on the home. Usually, the amount that is available to you for a home equity loan is the appraised value of the home minus the amount you owe on the home. Home equity loans are running over 9% these days.

You gain equity in a home through two ways....

1. Paying down the principal of the loan.
2. Market appreciation of a home.

If you just bought a house, odds are little time has passed for either of the two activities mentioned above to occur so you likely have little equity in the house....unless you made a big downpayment on the home.

What occurs during a refi that can give you cash is that they basically give you a new loan on the principle balance of the existing loan and then wrap a loan up for the extra cash portion into that loan. So, they give you $50,000 cash. Instead of your balance on the home loan being $200,000, it becomes $250,000 for the home loan principle balance plus the cash loan. Then the cash amount is spread out throughout the length and terms of the home loan. Get it?

Answer 2

Your house needs to increase in value before you can refinance and get cash out.
Say you just bought it for 200,000. The value needs to increase more than that. It usually takes a good six months to a year for your house to increase in value enough to get cash out. So, when it raises to say 250,000-you would have at least 50,000 in equity that you can get. But remember, all you are basically doing is borrowing that equity from yourself. You will have to refiniance your house to get the money and it will raise your loan amount and monthly payment. Then the terms of your loan start over. It's not always worth it.

Answer 3

I work for United Lenders Group and I work with over 45 different banking companies so I could get you a mortgage loan and pull cash out no matter how long ago you got your home
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Answer 4

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Answer 5

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