Homes in the greater Seattle – King County area have been experiencing higher home values. The demand for homes with the strong employment market in Seattle and lack of inventory has been pushing home prices higher and higher. What is not great news for home buyers wanting to live in the greater Seattle area, this does create an opportunity for homeowners. Homeowners can either sell their home to take advantage of the appreciate that we currently have, or they can consider a cash out refinance. The reasons for a cash out refinance can vary from wanting to consolidate debts, funding retirement, cashing out an ex or improving your home…just to name a few.
How much cash out can you get? The amount of equity you can pull from your home depends on what your home appraises for. With a cash-out refinance, a “full” appraisal will be done and (ideally) will be based on what homes like yours have recently sold and closed for in your neighborhood. Different mortgage programs have varying loan-to-value limitations based on the type of occupancy and the actual mortgage program.
What are the cost for a cash out refi? A cash-out refi has the same basic cost as a non-cash our refinance or a purchase. There’s really no such thing as a “no cost” refi as lenders use an increased rate to off-set or pay for the closing cost. We can provide you with a mortgage rate quote with several price points, including quotes priced with a rebate credit (higher rate to create a credit towards closing cost) or discount points to reduce your rate.
What are the interest rates for a cash out refi? Interest rates for cash out refinances are slightly higher than a non-cash out refinance. The higher percentage your loan to value is (loan amount compared to appraised value), the higher the rate may be. Click here if I can provide you with a detailed written rate quote for your home in Washington state.
How long does it take to do a cash out refi? A refinance takes about as long as a purchase transaction depending on how quickly you can provide supporting documentation to the lender. It can take anywhere from 30 – 60 days factoring in market volumes and appraisal turn times.
What if you just purchased your home? Cash our refinances require that you have owned your home for the last six months. However, if you paid cash for your home (did not finance it), then you may qualify for “delayed financing” which is essentially the same as a cash out refinance.
Refinancing may or may not make sense depending on what your personal scenario is, including how long you plan to retain your home. If your home is in Washington state, I’m happy to review your scenario with you. Click here for a mortgage rate quote or here to start the prequalification process.