Section 2: Am I Eligible for a Cash-out Refinance Loan

Eligibility For a Cash-out Refinance Loan 

In general, any borrower who need money for home improvements, paying down debt, or financing other major expenses, you could consider tapping into your home’s equity with a cash-out refinance. With a cash-out refinance, your existing mortgage is paid off and replaced by a new loan with a higher loan amount than what you owe on your home. You get the extra amount, minus any closing costs, as a lump sum payment to use as you wish.

*Don’t meet the minimum requirements? You still may be eligible: talk with an Orbit Home Loan specialist today.  (CLICK)

Documents Your Lender May Require

- W2s or 1099’s
- Bank Statements
- Pay Stubs
- Asset Statements
- Liability Statements
- Legal ID
- Mortgage Statement

Contact a lender and verify eligibility (CLICK)

Cash-out Refinance Lender Requirements 

Credit and Income
Today’s cash-out refinance rates are still near historic lows. However, these rates can be as much as 0.5% higher than a traditional mortgage refinance since you’re tapping your home equity.

Several factors impact your cash-out refi rate, such as:

• Credit score: A higher credit score can help you qualify for a lower mortgage rate.
• Loan-to-value ratio (LTV): A lower LTV ratio can reduce your rate if you don’t access all of your available home equity since you’re borrowing less.
• Repayment term: Longer repayment lengths have a higher interest rate but a lower monthly payment.
• Closing costs: Your lender may allow you to roll your closing costs into the loan. Unfortunately, this choice increases your APR and total amortization.
• Debt-to-income ratio (DTI): A higher DTI poses more risk and a lender may not approve your application. Strive to have a DTI ratio of 36% or less before you apply with a conventional mortgage lender.

With a cash-out refinance, you’ll pay the same interest rate on your existing mortgage principal and the lump-sum equity payment. Most lenders offer fixed interest rates so you can easily calculate your monthly payment.

Complete the application (CLICK)

How to Apply for a Conventional Loan
Get started today with one of the best and most secure ways possible. Here are Orbit Home Loans we have a trusted team ready to help you find your dream home. Talk with you trusted Orbit Home Loans broker that knows conventional loans and how to get the most from this hard-earned benefit. The process typically starts with getting pre-approved, which can often be done in minutes using your phone, laptop or tablet. 

Loan pre-approval is a key first step before making an offer on your dream home. Having that pre-approval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing. 

 

Questions about whether you qualify? (CLICK)