A simple example
Your home is worth $800,000 and you owe $300,000. With a cash-out refinance, you might take a new loan of $500,000. The first $300,000 pays off your old mortgage, and the remaining $200,000 (minus closing costs) comes to you.
How much can you take?
It depends on your home's value, your credit, and the loan program. On the home you live in, many conventional programs allow a new loan up to 80% of the home's value. In Texas, state law also limits cash-out on the home you live in to 80%.
Popular uses
- Paying off higher-interest debt
- Home improvements
- College costs
- Buying an investment property
When another option may be better
If you like the rate on your current mortgage, a HELOC or home equity loan lets you keep it and borrow only the extra amount. We'll compare both for you.
Frequently asked questions
Does cash-out change my whole mortgage?
Yes. You get a new rate, term, and payment on the full balance.
Are there closing costs?
Yes. They can often be paid from the loan proceeds.