Sample ImageTreasure Coast may be one of the best suburbs in Florida, however, the cost of living here is around 24% higher than the American average so there may be times when you need the extra cash for unexpected expenses like home repairs. In these instances, a cash-out refi loan with Element Funding Treasure Coast could be the best solution for you.

A cash-out refinance converts your home equity into cash. Unsure whether it's a right fit for you? Let's discuss the advantages and how a cash-out refinance works.

How does a cash-out refinance work?

A cash-out refi is a powerful financial tool that homeowners in Treasure Coast can take advantage of in cash-strapped situations. What happens is that you replace your current mortgage with a larger loan. The difference between what you owe and what you borrow is your cash-out. 

Let's say your home is worth $500k, and you currently owe $200k. That means you have $300k of home equity and up to $240k that you can cash out. Take note that you can't borrow all of your home's equity. Most programs allow a maximum of 80% of your home's value.  

If you want to know more about the computations, you can contact us at Team Troy Lending, the most experienced and trusted cash-out mortgage lender in Treasure Coast, FL.

Advantages of a Cash-Out Refinance

  • Can be used for any purpose. Unlike other loan types that limit what you can use the cash for, cash-out equity can be used on any needs you have. Whether for a home remodel or debt consolidation, you can use it without restrictions.

  • Get lower interest rates. Mortgage rates are generally lower compared to credit cards and personal loans, which means more savings.

  • Potential tax breaks. If you use the cash for home improvements for a primary residence or second home, you can use tax breaks when you file your taxes.

Want to want to know if a refinance in Indian River, St. Lucie, or Martin County is right for you? Get in touch with our loan experts at Element Funding Treasure Coast.

What are cash-out refinance requirements?

Credit Score

You need a credit score of 620 or higher to have a better chance of approval. If you have lower scores, you need to improve your scores before applying.

DTI

The CFPB or Consumer Financial Protection Bureau recommends not going over a 43% DTI. Sometimes a lower DTI is allowed as long as you have a high credit score.

Purpose of your refinance

You won't be restricted on what you can do with your cash, but you'll be asked whether it will be used to create new debt. For example, if you are buying an investment property, we'll need to ensure that the new mortgage terms qualify with the rental home payment.

Number of units in your home

You'll get less cash for two to four-unit homes than you would with a single-unit family home. 

Ready to apply for a cash-out refinance?

Now that you've learned how a cash-out refinance works, Team Troy Lending can give you the best home refinance in Treasure Coast.

We know that refinancing your home is a major decision, and our team of refinance experts is here to help you with the whole refinancing process. Get in touch today!