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Whether you want a kitchen renovation, a dream honeymoon, or even to just pay off your credit cards, getting the money for it can be costly. A cash-out refinance from AmeriSave is one of the smartest, most affordable ways to help pay for the things that are important to you. In just 3 minutes you can get credit approval and a great, low refinance rate.

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The average American
family has $6,270 in
credit card debt

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The average kitchen
remodel can cost as
much as $25,499

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Rehabbing a fixer-
upper costs about 10%
of the purchase price

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The average small
business needs $30,000
for start-up costs

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One year of room and
board at a private
college costs $13,620

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An average family
trip to Italy may cost
up to $12,950*

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*Assumes a family size of 4. Actual costs may be higher. See footer for source info1

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What is a Cash-Out Refinance?

If your home is worth more than your current loan balance, congrats! You’ve got home equity! With that home equity, you may be eligible to take a cash-out refinance for up to 80% of your home’s current value. And that difference between how much it’s worth and how much you owe means you can pay off your old mortgage with a new one that gives you cash back. You’ll still have monthly payments like before, but with a cash-out refinance mortgage you'll have new terms, could be eligible for a lower rate, and the cash for things you need.

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Frequently Asked Questions

The simple answer is a cash-out refinance is a mortgage refinance that lets you use the home equity that you’ve built in your current home to get cash. You’ll replace your existing mortgage with a new one that has a larger outstanding principal balance and new terms, similar to what you had. However, with a cash-out refinance, you’ll get the difference between those two mortgages as cash. The amount of cash you get is roughly based on your home’s current value and how much you have left on your existing mortgage before the refinance. You’ll still have monthly payments, and loan terms, but now you have a low-interest way to borrow cash that helps consolidate debt, pay for home improvements or even take a vacation.

Both home loans allow you to borrow money you need to consolidate debt or pay for house projects. But there’s a big difference between them. A cash-out refinance replaces your current mortgage with a new one. It will have new rates, new terms, and likely be bigger than the previous based on how much cash you need access to. A home equity loan is a second mortgage that lets you borrow money against your home equity, but in addition to your current mortgage.

No! You may think you’re earning rewards or benefits by putting large debt on your credit card, but it’s going to cost you significantly more in variable interest rates, high APR, fees, unfavorable terms, etc. If you carry too much debt on a credit card, it can hurt your credit score due to a high credit utilization rate. A cash-out refinance is one of the smartest ways to borrow money because of its low interest rates. Plus, it allows you to create a consistent monthly payment that you know you can afford and pay back over time.

Yes! VA, and FHA loans do allow cash-out refinancing, but USDA loans do not. Talk to one of our home financing experts to see if a cash-out refinance is right for your VA loan or FHA loan.

With AmeriSave, you can get credit approval and your new low rate in as little as 3 minutes. Once you are credit-approved and the process has begun, it takes 31 days on average from your application date to close on your loan.

Just like in a rate and term or most mortgages, there are closing costs associated with a cash-out refinance.

It’s your cash, it’s up to you! One benefit of borrowing money with a lower interest rate is to help consolidate and pay off higher rate debt, like credit cards, or old bills. You can also use the money to help finish the home project you’ve always wanted to do, or finally take that vacation you’ve dreamed up. Additionally, cash-out refinances are a great option to help pay for education like college, trade courses, grad school and more. Keep in mind that there are tax implications with a cash-out refinance. If you use the funds to make home improvements, then the interest paid on the loan is typically tax deductible. Speak to your tax advisor for more details on IRS rules related to how you’ll use your funds.

There are many factors that we consider including the total amount of the loan, the value of your home, your credit score and more. We will typically look at a “loan-to-value ratio” (or LTV) to help determine the cash out amount. This is a percentage that compares the amount of your current mortgage with the appraised value of the property. If you want to see how much cash your home equity could provide, try our cash-out refinance calculator.

The cash you receive from your cash-out loan is not viewed as taxable income by the IRS. However, when using the money you receive from your cash-out loan, there are certain things to keep in mind for when you file your tax returns. Typically, if the money is being used for anything home-related (home improvements, expansions, etc.), the interest you pay on it might be deductible. This is because the IRS includes improvements that increase the value of your property as an interest tax-deductible option. On the flip-side, if you are using the money for other things such as paying credit card debt, putting into savings, or taking a trip, the interest is not tax-deductible. You can find more information from the IRS in this publication.

This information is provided for general informational purposes and should not be relied upon as tax or financial advice. Please contact your accountant or financial consultant if you have specific questions about the money you take out for a cash-out refinance loan.

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