Turn Your Home Equity Into Cash
Access your Bergen County home equity for renovations, debt consolidation, or investments. Refinance up to 80% LTV and get cash at closing. Current rates ~6.65%.
NMLS 1577754 • Licensed in NJ, NY, PA, CT, MD, OH, GA
How Cash-Out Refinance Works
Replace your current mortgage with a larger loan and receive the difference in cash
Current Situation
You have a home worth $750,000 with a $300,000 mortgage balance. You've built $450,000 in equity (60%).
New Loan
You refinance for $600,000 (80% of home value). This pays off your $300,000 mortgage and gives you $300,000 cash.
Receive Cash
At closing, you receive $300,000 (minus closing costs ~$12K-$15K) to use as you see fit. One monthly payment.
💡 Key Difference from Rate-and-Term Refinance
Rate-and-term refinance: New loan = old balance (just changing rate/term)
Cash-out refinance: New loan > old balance (taking out equity in cash)
Smart Uses for Cash-Out Refinance
Home Renovations
Kitchen remodel, bathroom upgrades, additions, new roof. Improvements that increase home value.
Why it works: Increases home value, mortgage interest is tax-deductible (consult CPA)
Debt Consolidation
Pay off credit cards (15-25% APR), personal loans, auto loans. Replace with mortgage rate (6-7%).
Savings example: $50K credit card debt at 20% → 6.5% mortgage saves $675/month
Investment Property Down Payment
Use equity from primary home to purchase rental property or investment real estate.
Strategy: Leverage low mortgage rates to acquire income-producing assets
College Tuition / Major Expenses
Fund education, medical expenses, business startup. Lower rate than student loans or personal loans.
Compare: Private student loans 7-14% vs mortgage 6-7%
Cash-Out Refinance Requirements
Credit Score
620+
Minimum for conventional. 700+ gets best rates. FHA allows 580+ but higher rates.
Remaining Equity
20%
Must keep 20% equity after cash withdrawal (max 80% LTV). Some lenders allow 85% LTV with PMI.
Debt-to-Income
<43%
Total monthly debts divided by gross income. New mortgage payment included in calculation.
Additional Requirements
Cash-Out Refinance: Pros & Cons
Pros
- ✓Lower interest rate than credit cards, personal loans, or HELOCs
- ✓One monthly payment instead of multiple debts
- ✓Tax-deductible interest if used for home improvements (consult CPA)
- ✓Fixed rate stability vs variable rate home equity products
- ✓Access large amounts (up to 80% home value)
Cons
- ✗Closing costs 2-5% of loan amount ($12K-$30K on $600K)
- ✗Reset amortization to 30 years (pay interest longer)
- ✗Reduces home equity - less cushion if values drop
- ✗Risk of foreclosure if you can't afford new payment
- ✗Higher rate than rate-and-term refinance (~0.25% premium)
Calculate Your Available Equity
See exactly how much cash you can access with a cash-out refinance. Get personalized rate quotes and closing cost estimates.
Jimmy Joseph MBA • NMLS 1577754 • jjoseph@cmghomeloans.com