CASH-OUT REFINANCE

This is a mortgage-refinancing option in which the new mortgage is for a larger amount than the existing loan amount in order to convert home equity into cash.

What is a Cash-Out Refinance?

What Is a Cash Out Refinance?

Cash-out refinancing is the process of replacing an existing mortgage with a new one that typically extends more-favourable terms to the borrower. By refinancing your mortgage, you may be able to decrease your monthly mortgage payments, negotiate a lower interest rate, renegotiate the number of years—or term—of the loan, remove other borrowers from the loan obligation, or access cash through home equity that has built up over time.

This is a mortgage-refinancing option in which the new mortgage is for a larger amount than the existing loan amount in order to convert home equity into cash.

Here is an example of a Cash-Out Refinance.

Say you took out a $200,000 mortgage to buy a property and, after many years, you still owe $100,000. This means that you have built up at least $100,000 in home equity (assuming the property value has not dropped below $200,000). To convert a portion of that equity into cash, you could opt for GMG’s Cash-Out Refinance program.

If you wanted to convert $150,000 of your equity, you could refinance by taking out a new loan for a total of $150,000. The new mortgage would consist of the $100,000 remaining balance from the original loan plus the desired $50,000 that could be taken out in cash. In other words, you can assume a $150,000 new mortgage, pay back the $100,000 owed on the first mortgage, and have $50,000 in cash remaining.

The recent economic uncertainty coupled with the high amount of equity built into the value of existing real estate has created a surge in Cash-Out Refinancings!

GMG is an overseas U.S. mortgage specialist and our loan officers look forward to introducing you to GMG Cash-Out Refinancing program to help you unlock you home equity and provide the liquidity you require.

Look forward to hearing from you.

Case Study: Cash-Out Refinance

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