Cash-Out Refinance Calculator
Calculate the benefits of a cash-out refinance by comparing your current mortgage with a new loan that provides cash to you. Determine if refinancing for cash makes financial sense.
Current Mortgage
Cash-Out Refinance Offer
Cash-Out Summary
Cash Received:
$0.00
New Loan Amount:
$0.00
New Monthly Payment:
$0.00
Net Cash After Costs:
$0.00
Payment Comparison
Current Payment:
$0.00
New Payment:
$0.00
Monthly Difference:
$0.00
Payment Change:
N/A
Break-Even Analysis
Total Closing Costs:
$0.00
Monthly Savings:
$0.00
Break-Even Period:
0 months
Understanding Cash-Out Refinance
A cash-out refinance allows you to replace your current mortgage with a new one for a larger amount, receiving the difference in cash. This can be useful for home improvements, debt consolidation, or other large expenses, but it increases your overall debt.
How Cash-Out Refinance Works
The Process
- Appraise current home value
- Determine loan-to-value ratio
- Get new loan for higher amount
- Receive difference as cash
Loan-to-Value Limits
- Conventional: Up to 80% LTV
- FHA: Up to 80% LTV
- VA: Up to 90% LTV
- Investment properties: Lower limits
Benefits
- Access home equity as cash
- Potentially lower interest rates
- Longer loan terms available
- Consolidate high-interest debt
Risks
- Increased total debt
- Closing costs and fees
- Extended loan terms
- Loss of home equity
Cash-Out Refinance Costs
| Cost Type | Typical Range | When Paid |
|---|---|---|
| Origination Fees | 0.5-1.5% of loan amount | Closing |
| Appraisal Fee | $300-600 | Before closing |
| Title Insurance | $500-1,500 | Closing |
| Closing Costs | 2-5% of loan amount | Closing |
| Points | 0-2% of loan amount | Closing |
When Cash-Out Refinance Makes Sense
Good Candidates
Rate Environment
- Current rates 1-2% lower than existing
- Planning to stay in home long-term
- Can recoup costs through savings
- Break-even period within loan term
Cash Needs
- Home improvements that add value
- Consolidating high-interest debt
- Emergency fund building
- Investment opportunities
Equity Position
- Substantial home equity available
- Home value has appreciated
- Good credit score for best rates
- Stable income and employment
Financial Situation
- Can afford higher payments if needed
- Understanding of total costs
- Long-term home ownership plans
- Tax implications considered
Cash-Out vs Other Options
Cash-Out Refinance:
- Higher closing costs
- Replaces entire mortgage
- Can access large amounts
- Lower monthly payments possible
Home Equity Loan:
- Lower closing costs
- Second mortgage
- Fixed interest rate
- Shorter terms
Home Equity Line of Credit:
- Revolving credit
- Variable interest rate
- Only pay interest on amount used
- Flexible access to funds
Personal Loan:
- No home equity required
- Shorter terms
- Higher interest rates
- Smaller loan amounts
Key Takeaways for Cash-Out Refinance
- Cash-out refinance increases your total mortgage debt while providing access to home equity
- Calculate all closing costs and compare them to expected monthly savings
- Consider the break-even period - how long until savings offset the costs
- Only refinance if you plan to stay in your home long enough to recoup closing costs
- Use the cash for investments that provide returns higher than your mortgage rate
- Consider tax implications of pulling out home equity
- Shop around with multiple lenders for the best rates and terms
- Consult with a financial advisor to determine if cash-out refinance fits your situation