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A Cash Out mortgage loan is a new refinance of your existing mortgage loan. In the simplest of terms, Southern California homeowners who wish to use the “cash” (AKA) equity in their home for a variety of purposes, can do so, through a Cash Out loan. It is important to note, however, when deciding to seek approval for a Cash Out refinance in Southern California, that your mortgage balance will increase.
How Cash Out Loans/Cash Out Refinances Work in Southern California
For example, consider you’re a homeowner with a mortgage balance of $200,000 on your $600,000 home. You thereby have $400,000 in equity. A Southern California homeowner seeking to utilize some of that equity, could do so by refinancing the first mortgage to $300,000, and effectively receive the $100,000 cash, to use for other expenses. The cash that is withdrawn is not “free money” as your mortgage balance will now be $300,000. However, with low interest rates, this option is attractive to many Southern Californians who wish to pay off higher interest rates debts, such as credit cards.
A Cash Out refinance will have closing costs, but for many homeowners in SoCal who would like to use the cash they’ve built in their home for other expenditures or debts, this type of refinance may make a lot of financial sense.
It’s important to talk with an experienced, top-rated Southern California mortgage professional to determine whether a Cash-Out refinance is a good fit for your situation. Refinancing into a higher interest rate, for example, in order to get cash out now, may not be in your best financial interest for the future. However, if you refinance into a lower rate, and can use the equity you’ve built up in your home for other expenses, a Cash-Out refinance may be the perfect way to use your home to accomplish your short and long term financial goals.
At Summit Lending, we are proud to offer quick approvals, and loan closings on Cash-Out home loans. We are always available to answer any questions you have about home loan options in SoCal. We encourage you to contact us today, to learn more about the various home loan options available to you in Orange County, Riverside County, San Bernardino County, Ventura County, San Diego County, or Los Angeles County today.
Based in Huntington Beach, CA, with offices throughout the Southern California region, Summit Lending can be reached online, on Facebook, or via phone at 888-451-9006. As top a Yelp! reviewed home loan lender and top rated mortgage broker in Orange County, Summit Lending provides low interest rate mortgage loans, to buyers and homeowners all around the Southern California region.