Cash Out Refinance Mortgage Loan Eligibility Guidelines

Gustan Cho Team
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Cash Out Refinance Mortgage Loan Eligibility Guidelines

This BLOG On Cash Out Refinance Mortgage Loan Eligibility Guidelines Was UPDATED On June 17th, 2019

Cash Out Refinance Mortgage Loan
Gustan Cho Associates

Cash Out Refinance Mortgage Loan Programs:

  • Since the real estate and banking collapse of 2008, cash out refinance mortgage loans have not been too popular
  • This is because most homeowners have lost a large portion of their equity in their homes
  • However, for those who need cash out refinance mortgage loans,  Gustan Cho Associates can offer cash out refinance mortgage loans programs that will suit your needs

In this blog, we will discuss Cash Out Refinance Mortgage Loan Eligibility Guidelines and the benefits doing a cash out refinance.

Why Cash Out Refinance Mortgage Loan?

Why Cash Out Refinance Mortgage Loan?
Gustan Cho Associates

There are many reasons why homeowners seek cash out refinance mortgage loan.

  • Most of them get cash out refinance mortgage loans because they want to pay off their high-interest credit cards, automobile loans, installment loans, or student loans
  • Others get cash out refinance mortgage loan because they want to do home improvements, build an addition to their home, or have extra cash for a wedding, vacation, or for investment purposes
  • Still, others get cashout refinance mortgage loans to purchase a vacation or second homes

Whatever the reason, there are terms to consider before acting on getting cash out refinance mortgage loans.

Terms And Rates On Cash Out Refinance Mortgage Loan

Terms And Rates On Cash Out Refinance Mortgage Loan
Gustan Cho Associates

If you are shopping for cash out refinance mortgage loan, there are conditions that you need to consider.

  • Most mortgage bankers or banks do not do cashout refinance mortgage loans
  • If you are interested in cashout refinance mortgage loans, you should consult with a loan officer
  • Mortgage lenders have dozens of correspondent lenders
  • They should have investors who cater to cashout refinance mortgage loans
  • One of the things that you should realize is that mortgage rates will be higher for cashout refinance mortgage loans
  • Lenders will hit you with an adjustment just for being a cashout refinance mortgage loan
  • Most lenders prefer a 75% loan to value on cashout refinance mortgage loans
  • However, there are mortgage lenders who will go up to 80% loan to value on cashout refinance mortgage loans
  • There are a few lenders that will even go up to an 85% loan to value on cashout refinance mortgage loans
  • You must remember that the higher your loan to value is, the higher your mortgage rate will be

On cashout refinance mortgage loans higher than 80% loan to value, private mortgage insurance premiums apply.

Cash Out Refinance Mortgage Loan For Investment Properties

Cash Out Refinance Mortgage Loan For Investment Properties
Gustan Cho Associates

If you own second or vacation homes, you can still do a cash out refinance mortgage loan.

  • However, depending on mortgage lenders, most mortgage lenders might have tighter restrictions on second homes, vacation homes, and investment homes
  • I also specialize in Condotel purchase mortgage loans and Condotel refinance mortgage loans
  • With condotel refinance loans, the condotel lender will go up to 75% loan to value on regular rate and term condotel refinancing without a cashout

However, the maximum loan to value on a cashout refinance loan is restricted to 60% loan to value.

Loan To Value Requirements

Loan To Value Requirements
Gustan Cho Associates

Equity is key in determining how much cash out homeowners can get.

Here is the loan to value requirements on the particular loan programs:

  • HUD allows up to 85% LTV on FHA Loans
  • USDA does not allow cash-out refinance mortgages
  • VA allows up to 100% loan to value
  • Fannie Mae and Freddie Mac allow up to 80% cash out on primary residences and 75% LTV on investment properties
  • Non-QM Loans allow up to 80% LTV on owner occupant properties and 75% on investment properties

For more information on this blog or other mortgage topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

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