Cash Out Refinance
Cash-Out Refi in Ohio | Equity & Rates
“Acquire cash out of my home?” It sounds too good to be true, right? But it isn’t. We’re breaking down what your equity means for Cash-Out Refi success and talking rates for our Ohio clients.
When to Get a Cash-Out Refi
Cash-out is a specific type of refinancing that uses the equity in your home to acquire funds. A Cash-Out Refi ups your original mortgage to a larger one, and the difference between the two comes to you in the form of liquid assets.
For example, if your home is worth $550,000 and your mortgage balance is $450,000, you can refinance your $100,000 balance to $150,000 and receive the $50,000 cash at close.
With this cash comes the freedom to spend it in whatever way you choose. Freddie Mac, however, reports that 40% of customers use Cash-Out Refi funds to pay down or eliminate debt, while 31% invest it in home repairs or improvements.
The Effect of Equity
A Cash-Out Refinance borrows from the equity you have in your home. Therefore, the amount of equity you have matters. Higher equity means you can borrow more, and you can typically borrow up to 80% of your home’s equity.
So how do you know how much equity you have? Your home’s current value – Your remaining loan amount = Equity
For example, if you buy a $300,000 home and put 10% down ($30,000), you have a loan of $270,000. At this point in time, your equity can be determined by $300,000 – $270,000. So your equity is $30,000.
Good News, Buckeye Borrowers…
With the effect of equity in mind, we want to highlight what this means for our Ohio market. In the first quarter of 2021, the average Ohio homeowner gained $22,000 in equity, and by the year’s end, Ohio homeowners gained $27,000 in equity. With equity on the rise, now’s the time to cash in on a Cash-Out Refi.
In addition, refi rates in Ohio remain stable. The current average 30-year fixed mortgage refinance rate sits at 5.57%.*
Let’s GO(hio), it’s time to Cash-Out Refi
If you’re ready to take advantage of your equity and invest some cash, our Ohio team is ready to help. Contact us today to get your quick approval started.
*Rates estimated on June 27, 2022
Zillow. (n.d.) Compare today’s refinance rates in Ohio. Retrieved June 27, 2022 from https://www.zillow.com/refinance/oh/