What is a cash-out refinance?
Is a type if refinance that allows you to get money out of your property by refinancing the equity that you have on it.
Usually a cash-out refinance is a good idea if you plan on using the cash you receive to reinvest into the home or invest in something else. Making upgrades or repairs that can increase the value of your home are a great investment.
Who Can Get a Cash-Out Refinance Loan?
Qualifying for a cash-out refinance loan is similar to qualifying for an initial mortgage. Your lender will consider the loan-to-value ratio, your credit score and the appraised value of the home when deciding whether to issue the loan. The loan-to-value ratio is figured by dividing the mortgage amount owed by the appraised value. Typically, that figure must be less than 80%. You need a good credit rating to get the best interest rates, especially if your loan-to-value ratio is on the high end. You can also influence the appraised value is you are present during the appraisal and point out any improvements that have been made recently. Cash-out refinance requirements
A Real Life Case that I did,
I had a client lets name her Maria.
Maria owned 4 properties and she wanted to buy another property for her daughter. She went first to a Well-known bank and started the financing process after 3 weeks she got denied by the bank because the property that she wanted to buy did not meet certain requirements. She was very upset about that and also the time was running and the closing date was getting closer and closer and the risk of losing the initial deposit to go under contract was increasing. The next day after she got denied her realtor referred her to me So she contacted me and I asked her for every detail that she could told me about her financial life and after that I gave her the option to do a cash out Refi on one of her properties that was paid off. She agreed and we started the process 2 weeks later she got the check from the lender and the day after that she bought the new property with the money that she got from the cash-out refinanced property.
It was quick and painless!