What is a Cash-Out Refinance?
A cash-out refinance replaces your existing mortgage for an investment or commercial property with a loan for more than the amount you currently owe on your property. The difference goes to you in cash to spend on improvements, down payment for an additional investment, debt consolidation or other financial needs. Corporate Capital does not offer refinancing on owner-occupied residential properties unless it is mixed-use (owner lives in one of multiple units in a building, or building houses both a business and the owner’s living space).
What are the benefits of a Cash-Out Refinance?
Lower interest rates: Refinancing typically offers a lower interest rate. For instance, if you bought in 2000, the average mortgage rate was about 9%. Today, it’s considerably lower. But if you only want to lock in a lower interest rate on your mortgage and don’t need the cash, regular refinancing makes more sense.
Improve your credit score: Paying off your credit cards in full with a cash-out refinance can build your credit score by reducing your credit utilization ratio, the amount of available credit you’re using.
What do I need to apply for a Cash-Out Refinance?
In order to qualify for Cash-Out Refinancing, you must have:
- A credit score of 620 or higher
- Equity built up in property
- A recent appraisal