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Cash out Refi

I own my home outright.  I want to take out as much as possible for other investments.  If I do a cash out refi, can I take the standard 80% of value out?  Or is it less since it's a cash out loan?  Do I have to report the money taken out on my taxes?  Do mortgage companies typically give you the same rates as those purchasing homes?
  • June 08 2010 - Concord
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Answers (2)

The base rate for a purchase or refinance are the same. Today that would be depending on loan amount around 4.500% to 4.75% on a 30 year fixed product.

With a cash-out refinance there is an additional fee. These fees are usually incorporated into the rate. As mentioned, it will be less expensive to  limit yourself to 75%. At 75.01% to 80% the fees really jump.

This is assuming the loan amount is $729,750 or less. On portfolio jumbo loans there may or may not be additional fees. With a few portfolio lenders you may receive up to $2MM cash-out without any additional fee.  On a 30F the rate will be around 5.75%. 

You do not have to report the cash-out.This is not income. This is equity. Here is a link that shows you the fees as a percentage of the loan amount. https://www.efanniemae.com/sf/refmaterials/llpa/pdf/llpamatrix.pdf .... Happy funding, Rudi

  • June 08 2010
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Hi Losjeans5: You can cash out up to 80% of the appraised value of your home at the best rate available based on your credit and income to qualify. Cashing out at 75% does get you a slightly better rate. The money taken out is your equity and is not required to be reported as income. However there are limitations on taking a mortgage interest deduction that I would suggest you speak to a CPA to understand better. Rates by mortgage companies like my company are typically the best available as we have access to many lenders and cash out refinances are easier to do than purchase loans. 

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  • June 08 2010
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