What is Cash-Out Refinancing and How Does It Work?
Cash-out refinancing refers to the process of refinancing a home or business for more than the existing mortgage, thereby allowing cash to be returned to the borrower. For home or business owners who have properties with substantial accumulated equity, cash-out refinancing can provide funds for renovations or perhaps a business expansion.
Some considerations for cash-out refinancing include:
- The interest rate may be higher than the existing mortgage
- The monthly payment will be higher since the borrower is asking for additional money
- The mortgage terms could be different
- There are limits to the amount of cash available because lenders want equity to remain in the property
Existing property owners who have had previous financial difficulties may find it hard to get cash-out refinancing from conventional banks and lenders. Their criteria for lending usually include credit checks and reviews of previous foreclosures or bankruptcies. AHL Hard Money Network is more flexible in this regard because our investors are interested in the equity contained in the property and less concerned about other factors.
In addition to getting cash for renovations or expansion, owners can also use this money to pay off high interest rate debt such as credit cards, pay tax liens, or use the money for college tuition. Owners should be cautious about using cash-out refinancing for travel or non-essential purchases because it is adding more debt and a home or business is being used to secure the loan.
If you live in Florida and can’t get the cash you need from conventional sources for whatever reason, please contact AHL Hard Money Network today and let our investor network get you the money you need. Call us at 813-516-5210 for more information.