A cash-out refinance is a type of mortgage loan that allows you to tap into the equity you've built in your home. Instead of simply refinancing your existing mortgage balance to get a better interest rate or term (which is known as a rate-and-term refinance), a cash-out refinance replaces your current mortgage with a new, larger loan, and you receive the difference in cash—which you can use for just about any purpose.
It’s one of the most popular ways homeowners in strong equity positions can access large sums of money, often at a lower interest rate than personal loans, credit cards, or other unsecured financing options.
One of the most popular reasons—use your home’s equity to update your kitchen, add a bathroom, install a pool, or make energy-efficient upgrades
Pay off high-interest credit cards, personal loans, or other debts. Replacing multiple payments with one mortgage payment—often at a lower rate—can simplify your finances and save money over time.
Leverage your equity to put a down payment on a second home, rental property, or vacation home.
From buying a new vehicle to covering wedding costs or unexpected medical bills, a cash-out refinance gives you access to large sums of money at mortgage-level interest rates.
Let’s say you own a home worth $400,000 and you still owe $250,000 on your current mortgage.
You decide to do a cash-out refinance and refinance into a new loan for $320,000.
Home Value: $400,000
Current Mortgage Balance: $250,000
New Loan Amount: $320,000
Cash Received at Closing: $70,000 (before closing costs)
You now have a new mortgage for $320,000, and you walk away with $70,000 in cash that you can use however you’d like—home improvements, debt consolidation, education expenses, or even investing in a second property.
*Keep in mind, your monthly payment and loan term may change, and you’ll pay closing costs just like a regular mortgage. But it’s a powerful way to access the equity you’ve built in your home without selling it*
Raymond Upchurch
NMLS 960856
DRE#01267758
CalBRE #01840963
NMLS # 351707
Ray Upchurch Mortgage & Real Estate Broker
8300 Sierra College Boulevard Suite A
Roseville, CA 95661
Mon-Fri (8am-6pm)
Sat-Sun (By Appointment only)
Number: (916) 544-3229
Email: rayupchurch@gmail.com
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