Posted on: 06th Feb, 2009 03:00 pm
Why is my Texas mortgage refinaced considered a cashout if Iam not taking cashout?...My current mortgage is a house on 5 acres with the ajoining 20 acre tract in 1 loan. I want to refinace the house and 5 acres and clear the title on the the 20 acre tract. The house and 5 acres have been appraised at 250,000 which is more than enough to cover the existing 160,000 mortgage.
if you are refinancing for an amount more than your current mortgage balance, only then it will be considered as cash-out refinance. here, your home has been appraised for $250,000. but this doesn't mean you'll have to take out a refinance loan worth the entire amount. you can simply borrow $160,000 and pay off the existing mortgage. then it won't be considered as cash-out refinance.
To follow up to Sara's post. Are you paying off any other debt? If you are, then this is considered cash out as well.