Hi Rosane,
Welcome to the forums.
The various options in cash out refinance are 30 Year Fixed Rate Mortgage cash out refinance, 5 Year Interest-only ARM cash out refinance and 6 Month Libor cash out refinance.
We shall provide you with some details on these loan programs.
30 Year Fixed Rate Mortgage cash out refinance:
These loans are offered at low interest rates and their repayment period is about 30 years. Since the rates are low and fixed over the loan period, hence the borrower can pay off the loan with low monthly payments. This helps him to save cash for other expenses.
5 Year Interest-only ARM cash out refinance:
These mortgages have fixed rates for the first 5 years of the loan period and adjustable rates every year for the rest of the loan term, that is, 6 to 30 years. These loans allow for flexibility in monthly payments and paying the principal during the interest only period is optional. These loans do not require pre-payment penalty.
6 Month Libor cash out refinance:
These are similar to interest only mortgages. The interest rate on these loans is a sum of the Libor index plus a margin of one-eighth of one percentage point (1 point = 1% of the loan amount), that is, 0.125%. This margin does not change throughout the loan term. The index value is adjusted after every 6 months. Generally, these programs are applicable for 25 years with an interest only period of 10 years. These loans do not require prepayment penalty. A 5% down payment is required to obtain these loans. These mortgages are offered to those with less credit.
Hope this information will fulfill your requirements.
Regards,
Caron.
Welcome to the forums.
The various options in cash out refinance are 30 Year Fixed Rate Mortgage cash out refinance, 5 Year Interest-only ARM cash out refinance and 6 Month Libor cash out refinance.
We shall provide you with some details on these loan programs.
30 Year Fixed Rate Mortgage cash out refinance:
These loans are offered at low interest rates and their repayment period is about 30 years. Since the rates are low and fixed over the loan period, hence the borrower can pay off the loan with low monthly payments. This helps him to save cash for other expenses.
5 Year Interest-only ARM cash out refinance:
These mortgages have fixed rates for the first 5 years of the loan period and adjustable rates every year for the rest of the loan term, that is, 6 to 30 years. These loans allow for flexibility in monthly payments and paying the principal during the interest only period is optional. These loans do not require pre-payment penalty.
6 Month Libor cash out refinance:
These are similar to interest only mortgages. The interest rate on these loans is a sum of the Libor index plus a margin of one-eighth of one percentage point (1 point = 1% of the loan amount), that is, 0.125%. This margin does not change throughout the loan term. The index value is adjusted after every 6 months. Generally, these programs are applicable for 25 years with an interest only period of 10 years. These loans do not require prepayment penalty. A 5% down payment is required to obtain these loans. These mortgages are offered to those with less credit.
Hope this information will fulfill your requirements.
Regards,
Caron.
i am really confused with whether to go with a home equity loan or cash-out refinance. any advice ?
hi mike.d
welcome to mortgagefit forum.
a cash-out refinance loan and home equity loan differ from each other in some aspects. a cash-out refinance is a replacement of your existing mortgage. it is a home loan having an amount greater than the loan balance of your existing mortgage. such loans are secured by the same property that is mortgaged previously.
on the other hand, a home equity loan is a kind of second mortgage that is taken by keeping the home equity as the security for the loan. moreover, the interest rate on a cash out-refinance loan is usually lower than that of the home equity loan.
further, when you refinance your existing mortgage, you are required to pay the closing costs which are quite minimal in case of home equity loan.
whether you will take a cash-out refinance loan or a home equity loan, depends on your purpose. if you want to refinance your existing mortgage as well as make home improvements, it is better to go for cash-out refinance loan. but if you want to consolidate your debts or make home repairs, you can take a home equity loan.
hope we have cleared your doubts. for further information on these loans, visit http://www.mortgagefit.com/home-equity.html and http://www.mortgagefit.com/cash-refinance.html
please feel free to post further queries.
regards,
caron.
welcome to mortgagefit forum.
a cash-out refinance loan and home equity loan differ from each other in some aspects. a cash-out refinance is a replacement of your existing mortgage. it is a home loan having an amount greater than the loan balance of your existing mortgage. such loans are secured by the same property that is mortgaged previously.
on the other hand, a home equity loan is a kind of second mortgage that is taken by keeping the home equity as the security for the loan. moreover, the interest rate on a cash out-refinance loan is usually lower than that of the home equity loan.
further, when you refinance your existing mortgage, you are required to pay the closing costs which are quite minimal in case of home equity loan.
whether you will take a cash-out refinance loan or a home equity loan, depends on your purpose. if you want to refinance your existing mortgage as well as make home improvements, it is better to go for cash-out refinance loan. but if you want to consolidate your debts or make home repairs, you can take a home equity loan.
hope we have cleared your doubts. for further information on these loans, visit http://www.mortgagefit.com/home-equity.html and http://www.mortgagefit.com/cash-refinance.html
please feel free to post further queries.
regards,
caron.
6 Month Libor: Cash out refinance - It is also terms as "Interest Only" Loan.
I'm trying to refinance to cash out. Our mortgae boker wants us to sign the same paper we will at closing now, then he said that it as to have a three day hold ( something like a resining period, then go to processing, then do something else, and then actually close a week and half after sign the first set of paper. And we won't get our check for cash out for a day or to after closing. We have done this before, but it didn't work this way, we signed a mortgage application, a lock in and then just signed papers at closing and recieved our check then, and also were told that we had 3 days to resined, but this guy is not saying this. Does this sound strange
Welcome guest,
A similar query has been answered at http://www.mortgagefit.com/refinance/cashout-closing.html . Please have a look at what the community members have said.
A similar query has been answered at http://www.mortgagefit.com/refinance/cashout-closing.html . Please have a look at what the community members have said.
By law on a refinance of your primary residence you have a three day right of recission, meaning that once you go to closing you must wait three business days ( including Saturday as a recission day you just can not fund on Saturday) before funds can be disburse to you.
It sounds as if everything is on the up and up I can recommend you review your documents during this time and make sure everything that was initially disclosed is still correct, Review your TIL ( Truth in lending) for your APR and any pre-payment penalties. Good luck !!
It sounds as if everything is on the up and up I can recommend you review your documents during this time and make sure everything that was initially disclosed is still correct, Review your TIL ( Truth in lending) for your APR and any pre-payment penalties. Good luck !!
Lenny, I guess for purchase loans too, the funds are disbursed 3 days after the closing, right?
http://www.mortgagefit.com/refinance/cashout-closing.html
Sara,
This only applies to the refinancing of your primary residence. 2nd home or investment properties will fund the same day you sign your documents.
Does not apply in a purchase transaction.
This only applies to the refinancing of your primary residence. 2nd home or investment properties will fund the same day you sign your documents.
Does not apply in a purchase transaction.
Conventional loans allow cashout refinancing up to 90% of the loan to value.
FHA allows up to 95% loan to value.
VA allows up to 90% loan to value.
FHA has really low rates, so it maybe worthwhile to look at it.
Ask your current lender if they offer FHA loans.
The rates maybe lower than your current mortgage, and definitely lower than the 2nd mortgage rates.
FHA allows up to 95% loan to value.
VA allows up to 90% loan to value.
FHA has really low rates, so it maybe worthwhile to look at it.
Ask your current lender if they offer FHA loans.
The rates maybe lower than your current mortgage, and definitely lower than the 2nd mortgage rates.
funds for purchase transactions are disbursed on the same day. if there is someone out there holding funds, it is outrageous.
the biggest difference between cash-out refinances and home equity loans these days is that a large number of lenders has retreated from the home equity business.
the biggest difference between cash-out refinances and home equity loans these days is that a large number of lenders has retreated from the home equity business.
