Corpus Christi Cash-Out Refinance

Refinancing is a popular option in real estate financing. Borrowers who want better terms can use refinancing by obtaining a new loan, paying off the existing one, and paying the new loan under renegotiated loan terms or lower interest rates. 

There are two types of refinancing agreements: rate & term refinancing and cash-out refinancing. 

Capital Home Mortgage offers both, but let’s discuss what cash-out refinancing is here. This type of refinancing has a unique feature that can suit particular borrowers. Read more about cash-out refinancing below, or better yet, reach out to our Corpus Christi loan experts to understand these two.

What is a Corpus Christi Cash-out Refinance?

Cash-out is a refinancing agreement wherein the borrower can get a new loan to pay off the existing loan and get extra cash. Unlike rate & term refinancing, cash-out refinancing is like borrowing an amount that’s more than the current loan balance. A 100% financing is almost impossible for cash-out refinancing, and lenders generally require 20% equity after refinancing.

For example, let’s say the home is worth $600,000 with a remaining mortgage balance of $200,000. The home equity is $400,000 ($600,000 – $200,000). To qualify for refinancing, you need at least $80,000 equity ($400,000 x 20%). Assuming this scenario qualifies, the borrower can borrow $225,000 to pay the $200,000 unpaid mortgage and take home $25,000.

Requirements for Cash-out Refinancing

Before applying,  you must consider specific Corpus Christi cash-out refinancing rules. The most important rule is the 20% rule. You can only qualify for refinancing if you have at least 20% home equity. However, having at least 20% is not a guarantee that you’ll qualify. There are still other factors considered. A higher home equity percentage is ideal for increasing your chances of approval. It’s best to wait a few more years before refinancing to obtain a better result.

Your credit score is another important factor. You need a credit score of 620 to be eligible for a cash-out refi. If you faithfully pay your mortgages on time, you need not worry about your credit score because a few years of religious payments can boost your credit score.

Apply For Cash-Out Refinance in Corpus Christi

Start your refinancing by speaking to our loan officers in Corpus Christi. We strive to help our clients find the best mortgage product for their needs. Through direct mortgage lending, we handle all applications and provide our clients with a smooth and painless process. We also offer competitive interest rates. Call (361) 724-3166 to get your application underway.