A Cash Out Refinance allows homeowners to tap into their home equity and receive cash for home improvements, debt consolidation, investments, or other financial needs. By refinancing your mortgage for more than you owe, you can access lump-sum funds while securing a new loan with potentially better terms. Find out how a cash-out refinance can help you achieve your financial goals today!
A cash out refinance allows you to refinance your existing mortgage into a new loan with a higher balance. The difference between what you owe and the new loan amount is paid to you in cash, using the equity you’ve built in your home.
Your current mortgage is replaced with a new one. If your home is worth more than what you owe, you can take out that difference as cash. This process gives you a lump sum that can be used however you need, while still keeping one mortgage payment.
The funds from a cash out refinance can be used for anything — from home renovations and college tuition to medical bills or paying off high-interest debt. Many homeowners also use it to invest in real estate or build emergency savings.
Most lenders require you to retain at least 20 percent equity in your home after the refinance. That means you typically need significant equity built up to qualify for a cash out refinance, depending on your home’s value and loan program.
Yes. A cash out refinance may also allow you to lock in a lower interest rate if current market rates are more favorable than your existing mortgage. This can improve your monthly payment even as you take cash out.
If you need a large amount of money and want to leverage your home’s value without taking on a second loan, this option may be ideal. It’s especially useful for those with strong credit and a long-term plan for the funds.
At LUMI Funding Group, we simplify the refinance process so you can tap into your equity with clarity and confidence. We help you determine how much cash you can access, guide you through the numbers, and explain your options in plain terms. Whether you want to renovate, pay off debt, or prepare for the future, we’ll help you choose a refinance solution that fits your goals without overextending your budget.
Learn how a cash out refinance works, how much you can borrow, and whether this option is right for your current financial needs and long-term goals.
It depends on your home’s appraised value, the balance on your current mortgage, and lender guidelines. Most lenders allow you to borrow up to 80 percent of your home’s value, minus what you owe.
Yes. Like any mortgage, a cash out refinance comes with closing costs. These can often be rolled into your loan amount to avoid paying them out of pocket at closing.
Yes. Your new loan will have a fresh term, typically 15 or 30 years. This could mean starting over on your repayment timeline, but you may still benefit from a lower rate or lower monthly payments.
It might. Your payment could increase or decrease depending on your new loan amount, interest rate, and loan term. We’ll help you estimate this based on your goals.
Possibly. While better credit usually helps you secure more favorable terms, some lenders offer cash out refinance programs for borrowers with less-than-perfect credit. You may also qualify for FHA or VA refinance options.
In most cases, yes. An updated appraisal is needed to confirm your home’s value and determine how much equity you have available to borrow against.
A cash out refinance lets you access your home’s equity and convert it into usable cash. This option is ideal for homeowners with solid equity who want to improve their home, consolidate high-interest debt, or cover major expenses. While it resets your mortgage term and comes with closing costs, it can also offer a lower rate or more manageable monthly payment. With the right planning, a cash out refinance can be a smart way to improve both your property and financial outlook.
