Refinancing refund (in the case of real property) occurs when a loan is taken on an existing property, and the loan amount is above and beyond the transaction fee, the proceeds of existing liens, and associated costs.
Video Cash out refinancing
Definisi
Strictly speaking, all debt refinancing is "cash-out," when funds are taken to use for anything other than repaying existing loans.
In the case of the general use of the term, cash out refinancing refers to when the liquidated equity of the property above and beyond the amount of payments from an existing loan held in the lien on the property, borrowing costs, the costs associated with the loan, taxes, insurance, , insurance reserves, and in the past other non-lien debts held on behalf of the owner are paid on the basis of the proceeds of the loan.
Maps Cash out refinancing
Exit Refund Example
A homeowner who owes $ 80,000 to a house worth $ 200,000 has $ 120,000 in equity. The equity can be liquidated with a refinance cash-out loan providing a loan greater than $ 80,000.
The total amount of equity that can be withdrawn with a refinance of cash depends on the mortgage lender, the refinancing cash out program, and other relative factors, such as the value of the home.
How is refinancing cash different from a home equity loan?
- A home equity loan is a separate loan over your first mortgage.
- Cash repayments are the replacement of your first mortgage.
- Interest rates on refinancing cash flows are usually, but not always, lower than the interest rate on a home equity loan.
- You pay a closing fee when you refinance your mortgage.
- Generally, you do not pay closing costs for a home equity loan.
- The closing costs can be hundreds or thousands of dollars.
Related topics
Conversely, "Level-and-time" refinancing occurs when better credit entries, better loan terms, or both become available to owners restructuring their debt portfolios as they relate to the liens owned on the subject property. Consolidating various loans into one loan without spending cash is also an interest rate and time period.
Loan-to-value restrictions, and other factors in loan approval determine how much cash can be taken out of the equity of a property.
See also
- California Proposition 13 (1978), USA.
- Property bubble
- Inflation
- Home equity
Source of the article : Wikipedia
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