A” cash-out” refinance allows homeowners the opportunity to access some of the equity that they have established in their home through a refinance or home equity loan.

When individuals choose a “cash-out” refinance, they pay off their existing mortgage with a new loan and a higher balance.  The difference between their previous mortgage and the new loan is in turn made available to them in the form of cash.

For instance, if one owed $170,000 and he or she took a new loan for $210,000, then the difference between the two mortgages would literally be provided as “cash”.

The other way homeowners can access their equity is with a Home Equity Line of Credit or HELOC.  A HELOC is essentially like having a credit card that is tied to the equity in your home.  If you don’t use it, you won’t have a monthly payment, however when you do it will be treated like any other revolving account except that it is linked to your home.

As to which loan makes the most sense for you will naturally depend upon your specific situation.  Our mortgage specialists will take the time to analyze and review your circumstances and recommend the best option.