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Cash Out Refinance Calculator
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Cash Out Refinance Calculator

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Use our Cash Out Refinance Calculator to determine how much cash you can take out of your home when you refinance your mortgage. This calculator uses your estimated property value, current mortgage balance and new loan amount determine to if you have enough equity in your home to take money out.
The calculator also factors in the interest rate, length and program for your new mortgage so you understand how these inputs impact your new monthly payment and potential cost savings. The mortgage rate for a cash out refinance is usually higher than for a regular refinance so this is an important input to consider.
The calculator enables you to compare your existing monthly mortgage payment to your new payment and determine the total interest expense for your new mortgage. You can also review the proceeds you can take out when you refinance, net of closing costs, as well as the estimated minimum property value required to qualify for the mortgage based on a maximum loan-to-value (LTV) ratio. You can use this information to assess if the value of your home is high enough to access the amount of cash you want.
The calculator also shows you how long it takes to recover your closing costs if you are able to lower your monthly payment when you refinance. While accessing the equity in your home is typically the primary goal of cash out refinance, reducing your mortgage payment can provide an added benefit.
Use our Cash Out Refinance Calculator to compare numerous financing options to find the one that works best for you. We also offer a version of this calculator that does not require personal information.

Inputs
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When you provide valid personal info we may connect you with lenders which enables you to compare mortgage proposals and find the mortgage that is right for you. Click here for a version of this calculator that does not require personal info
Outputs
 
Monthly mortgage payment based on new mortgage terms
 
Total interest expense you will pay over the life of your new mortgage based on the terms of your refinancing
 
 
Depending on the your existing mortgage balance, the amount of your new mortgage and closing costs, you may be able to keep some of the proceeds when you refinance your mortgage. Your property value and LTV ratio also determine your ability to take cash out when you refinance. In some cases, you may be required to contribute money to cover closing costs
 
Minimum required value of property you are refinancing in order to qualify for your new mortgage amount. Based on a maximum Loan-to-Value (LTV) ratio of 80% (the ratio of mortgage amount plus recurring and non-recurring closing costs to the value of the property). Lenders typically require an LTV of 80% or less if you are taking cash out when refinancing your mortgage
 
Savings from Refinancing
The amount of money you save (or additional expense you incur) per month by refinancing your mortgage to finance a major purchase as compared to keeping your existing mortgage and obtaining a separate loan to finance a major purchase
 
The amount of time it will take you to recover the non-recurring closing costs required to refinance your mortgage based on your savings per month
 
 
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Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
 
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Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
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Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
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Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
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Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
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Points More Info
Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
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FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
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Other Fees More Info

Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

Total Lender Fees
*Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
Current Mortgage Refinance Rates as of December 11, 2018
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
While we pride ourselves on the quality and breadth of the FREEandCLEAR mortgage calculators please note that they should be used for informational purposes only. Our calculators rely on assumptions by us and inputs and assumptions provided by you, which may be inaccurate. The outputs from our calculators are estimates only and should not be used as the sole basis for making any financial decisions. Always consult multiple financial professionals when determining the mortgage size and program that is appropriate for you.

What Borrowers Should Know About a Cash Out Refinance

1

Make Sure You Have Sufficient Equity in Your Property

You must have enough equity in your property to take cash out of it.  Equity is the difference between the value of your property and the amount of debt on a property.  For example, if your property value is $100,000 and your mortgage balance is $70,000 then you have $30,000 in home equity: $100,000 (property value) - $70,000 (mortgage balance) = $30,000 (home equity).  Most lenders apply a maximum loan-value (LTV) ratio of 80% for a cash out refinance and some lenders apply a lower LTV ratio of 60% - 70% for larger mortgage amounts (jumbo loans) or if you are taking a significant amount of money out of your home.  Before you apply for a cash out refinance make sure that your property is valued high enough to support the mortgage amount you are seeking.  If the value of your property has declined or you have a significant mortgage balance you may not have sufficient equity to do a cash out refinance.  Our Cash Out Refinance Calculator shows you the minimum property value required to qualify for the refinance.     

2

Your Interest Rate May Be Higher

Lenders typically charge a higher interest rate for a cash out refinance as compared to a regular mortgage refinance.  In some cases your interest rate may be .250% to .750% higher for a cash out refinance depending on  your credit score, loan-to-value (LTV) ratio and other factors.  Lenders charge a higher interest rate because the risk for a cash out refinance is generally perceived to be higher than other mortgages.  Borrowers should be sure to shop multiple lenders to find the best terms for a cash out refinance.  Use our calculator to understand your mortgage rate impacts your new loan payment and potential monthly savings compared to your current payment.

3

Consider All Your Home Financing Options

While a cash out refinance offers significant financial benefits borrowers should consider other home financing options as well.  In some cases borrowers are better off using a separate loan such as a home equity loan or home equity line of credit (HELOC) to access the equity in their home.  Additionally, if borrowers are using the proceeds from a cash out refinance for expenditures such as college tuition it may make more sense to take out a separate college tuition loan.  A second mortgage or separate loan may charge a lower interest rate than a cash out refinance or have a shorter term, which reduces your total interest expense over the life of your mortgage.  Unless you are able to reduce your interest rate or shorten your mortgage term with a cash out refinance then not refinancing and using a second loan may save you money in the long run.   

4

How Borrowers Can Use Proceeds from a Cash Out Refinance

Most lenders do not restrict how borrowers use proceeds from a cash out refinance which means you can use the money for any number of purposes such as home renovations or remodeling, college tuition, buying a second home, investments or traveling.  Because you can use your loan proceeds however you want, a cash out refinance provides borrowers with significant financial flexibility.  With our calculator you can determine your total proceeds, after closing costs.  How you spend the money is up to you. 

5

Multiple Cash Out Refinance Programs are Available to Borrowers

While many borrowers select conventional cash out refinance programs there are additional options available to borrowers.  The FHA cash our refinance program offers more flexible qualification guidelines including a higher maximum loan-to-value (LTV) ratio of 85% and lower required credit score.  The higher LTV ratio enables you to access more equity in your home while the lower credit score requirement enables credit-challenged borrowers to qualify for a cash out refinance.  The downside of an FHA loan is that you are required to pay an upfront and ongoing mortgage insurance premium (FHA MIP), which are additional costs for borrowers.  Conventional cash out refinance programs usually do not require borrowers to pay mortgage insurance (PMI).

More FREEandCLEAR Mortgage Resources

Mortgage Guides

Cash Out Refinance Overview

Review our comprehensive explanation of how a cash out refinance works including key borrower considerations and an informative example of a cash out refinance

Resources

Comparing a Cash Out Refinance to a Separate Loan

Borrowers should compare a cash out refinance to a separate loan such as a home equity loan or line of credit. In some cases it makes more financial sense to obtain a second loan or mortgage instead of doing a cash out refinance

Resources

Mortgage Refinance Rates

Compare mortgage refinance rates for leading lenders near you.  Comparing mortgage proposals from multiple lenders is the best way to save money when you refinance

Ask a Mortgage Expert

Mortgage Expert

Got mortgage questions? We love answering them. Submit your mortgage questions and receive an informative response within 24 hours

Programs

Best Options for Taking Cash Out of Your Home

Compare the best ways to access the equity in your home -- including a cash out refinance, home equity loan, HELOC or reverse mortgage -- to understand the financing option that is right for you

Mortgage Expert Insights

FHA Cash Out Refinance Guide

Review program eligibility guidelines and qualification requirements for the FHA Cash Out Refinance program and understand why this could be the right financing option for people with limited homeowners equity and imperfect credit

Sources

Cash Out Refinance: http://myhome.freddiemac.com/refinance/cash-out.html

About the calculator developer

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

Michael Jensen LinkedInLinkedIn | Email Michael JensenEmail
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