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There are two types of mortgage refinances that a person can do on their home mortgage; Rate and Term or Cash Out.
A cash-out refinance is when a homeowner would like to draw equity from their home with a new mortgage loan. Basically, if you have the room to move as far as your LTV, or loan to value ratio, you can refinance your current mortgage for a new rate and a new amount while drawing out the difference between the old mortgage and new mortgage in cash. For people looking to fix up their homes, taking advantage of current refinancerates to do a cash out refinance is definitely the way to go. You are basically taking money from your home and putting it right back in through home improvements.
Refinance rates for cash out refinances will vary depending on the LTV you wish to borrow and the term with which you choose to repay the loan. Be sure to ask about the tax implications of taking a cash out refinance when you are looking for refinance rates.
|Jennifer Mathes, Ph.D.|