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What to Expect When Getting Cash Out


If you find yourself wondering about cash-out refinances, you are not alone. Many people decide to get a cash-out refinance for reasons such as needing home improvements, helping pay for a child’s college tuition, or simply wanting a better rate while accessing the equity of one’s home. Below is what you can expect when getting a cash-out refinance.


If you are thinking about a cash-out refinance, there are some qualifications you will have to meet to qualify. Typically, you can borrow up to 80% of the equity in your home. You will also need a good credit score and have made six consecutive on time payments on your current mortgage. There are different types of cash-out refinances, like an FHA or VA, that have slightly different qualification standards. If you are interested in learning more about cash out refinance options, please speak to your lender.

How Much Can You Cash Out

Most lenders allow you to finance up to 80% of the value of your home. Certain lenders allow you to get a loan with a higher loan-to-value, meaning you can take more equity out of your home. In other words, if your home is worth $250,000 and you owe $150,000 then you have $100,000 in equity. If your lender allows you to take out up to 80 percent of your home’s value then you can refinance your loan and get up to $50,000. Again, certain types of refinances may allow you to borrow more, so make sure to check with your lender about their current offers.

Loan Costs

Acquiring a new loan comes with various fees and closing costs. Usually, they can be deducted from the equity you access or rolled into the new mortgage. Talk to your lender about the fees and closing costs beforehand. You will need to weigh the costs versus the benefits of your cash-out refinance to see if it makes sense.


Appraisals are a big part of the refinancing process. The appraisal is what lenders use to verify the value of your home and if it makes sense for you to refinance. An appraisal may take a few hours to complete and the fee is usually paid by the borrower. Not all refinances require an appraisal; however, cash out refinances require an appraisal.

These are some basic things to expect from a cash-out refinance. Your lender will advise you on which cash out refinance products you may qualify for and how to get started.