|
What is a Cash Out Morgage Refi?
Cash Out Morgage refinancing specifically refers to the liquidation of equity from a property by paying off an existing morgage with a new loan of a higher amount. For example, if you have an existing loan of $200,000 you might apply for a loan amount of, say, $250,000. This would allow you to pay off your existing loan and, after paying loan fees and other costs associated with refinancing (taxes, title, escrow, appraisal) you would receive the difference as 'Cash Out'. In our example that the 'difference' would probably be about $45,000 in Cash Out.
This is a popular option for people paying off debts---especially when you can actually lower your existing interest rate in the process. For instance, if your current rate was 7.5% and you could get Cash Out and lower your rate to 6.875% that would probably be a better solution than getting a Home Equity Loan which would have a much higher interest rate.
Other Important Morgage Terms
Buyer's Broker -
An agent hired by a buyer to locate a property for purchase. The broker represents the buyer and negotiates with the seller's broker for the best possible deal for the buyer.
Buyer's Market -
Market conditions that favor the buyer. For example, a market in which there are more sellers than buyers. As a result, a buyer has an excess supply of homes from which to choose and can negotiate a lower price. A buyer's market may be caused by an economic slump or overbuilding.
Bylaws -
Refers to the rules and regulations emplaced by a Condominium or HomeOwner's Association.
Call Option -
A clause in the mortgage that gives the lender the right to "call" the mortgage due and payable at the end of a given length of time, for whatever reason.
Capital Gains -
When you sell a capital asset at a profit, such as real estate, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain.
Capital Improvement -
Any item, structure or addition that is a permanent improvement to the property.
Caps – Provisions on adjustable rate morgages that limit how much the interest rate or morgage payments may increase or decrease in an adjustment period or over the life of the loan.
|
Cash Out Morgage Refinancing - Application & Information For Cash Out Refi
We don't sell your information to multiple morgage brokers and call it 'competition'
