FOR HOME OWNERS
Cashout Loan
Have goals like consolidating debt, paying for college, or making home improvements? A cash-out refinance through Align Lending replaces your current mortgage with a larger one and hands you the difference in cash, leaving you with a single loan and a single payment.
Is a cash-out refinance for you?
You Are Willing To Replace Your Mortgage
A cash-out refinance pays off your current loan and writes a new one for more than you owe. Your existing rate and term go with it, so find out what you are on today before you go further.
You Need A Lump Sum
And have built enough equity that 80% of your home's value comfortably clears your current balance. What is left after that balance is paid off, minus closing costs, is the cash you receive.
Your Budget Has Room
You will carry one payment rather than two, but it is built on a larger balance than you owe now. On a fixed-rate cash-out that payment stays the same for the life of the loan.
Guidelines for this Loan
If your details are close to these guidelines, we encourage you to apply or contact us. Even if you do not qualify for a cash-out refinance, we could have other options for you.
Credit
Equity
Closing Costs
Cash-out refinance against borrowing behind your mortgage
A cash-out replaces your existing mortgage with a larger one. That is the crucial difference: whatever rate and term you have now, you give up. Sometimes that is a bargain and sometimes it is very expensive.
| Consideration | Cash-out refinance | Second loan behind it |
|---|---|---|
| What happens to your current mortgage | It is paid off and replaced. The rate you have today is gone. | Untouched. It carries on exactly as it is. |
| When this is clearly the better move | When today's terms are no worse than the ones you hold, so replacing costs you nothing. | When you hold a low rate you would never get back. |
| Amount available | Usually up to 80% of the value, less what you owe. | Generally a smaller share, since it sits behind the first loan. |
| Cost to set up | Full closing costs on the whole new balance. | Lower, because the loan is smaller. |
| Number of payments afterwards | One. | Two, on different terms and possibly different schedules. |
| The question that settles it | What rate are you on now? If you do not know it, find out before anything else. | Same question, opposite answer. |
Compare both against my current loan
Estimate and Explore
Calculators are a great way to learn and see what’s possible.
Down Payment Calculator
Learn how much cash you need to buy the home in your mind.
Home equity loan or cash-out refinance
Everyone’s situation is different. What might be right for one person might not be right for you. Apply or contact us – it’s the best way to explore your unique options.
| Home Equity Loan | Cash-Out Refinance | |
|---|---|---|
| Interest Rate | Likely Higher | Likely Lower |
| Mortgage Payments | Two Monthly Payments | One Monthly Payment |
| Length of Loan | 10, 15, 20 or 30-Year Term | From 8 & Up To 30-Year Terms |
| Closing Costs | Yes | Yes |
Get More In-Depth Details
Articles that give you more information about this loan and explain how mortgages work.
Frequently Asked Questions
Answers to questions about this loan we heard from people like you during research.
Will a cash-out refinance cost me the rate I have now?
Yes, and it is the first thing to check. A cash-out replaces your existing mortgage entirely, so whatever rate and term you hold today are gone. If you are sitting on a low rate from a few years ago, borrowing behind it with a home equity loan or line usually costs far less overall, even though the rate on that second loan looks higher.
How much cash can I actually take out?
Most cash-out refinances allow up to 80% of the home’s value, minus what you still owe. On a $400,000 home with a $220,000 balance that is roughly $100,000 before costs. VA has its own rules and can go higher for eligible borrowers. An appraisal sets the value, not an online estimate.
What can I use the money for?
Anything. Most people use it for renovations, consolidating higher-interest debt, or a down payment on another property. There is no restriction on the use, though what you spend it on should be worth trading your current mortgage terms for.
How long does a cash-out refinance take?
Usually thirty to forty-five days, much like a purchase. It needs a full application, an appraisal and underwriting. If the property is your primary residence there is also a three day right of rescission after closing before the funds are released.
Does taking cash out hurt my credit?
There is a small temporary dip from the credit pull and from opening a new account, and the old mortgage closing shortens your average account age. Both recover. Using the cash to clear revolving balances usually helps your score more than the refinance hurt it.
Not sure whether tapping equity is the right move? Start with a home equity strategy review. The first question is always why.
