Section 5: Jumbo Cash-out Refinance Loans
Jumbo Cash-out Refinance Loans
A cash-out refinance is a mortgage-refinancing option in which an old mortgage is replaced by a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some cash. With a cash-out refinance, you're getting a new home loan for more than you currently owe on your house. The difference between that new mortgage amount and the balance on your previous mortgage goes to you at closing in cash, which you can spend on home improvements, debt consolidation or other financial needs. However, you'll now be repaying a larger loan with different terms, so it's important to weigh the pros and cons before committing to a cash-out refi. The important thing to remember when dealing with a cash-out loan is that most traditional loans offer this option for a refinance so the terms and requirements might be different.
Jumbo Cash-out Refinance Requirements
Cash-out refinancing work like this: Your Orbit Home Loan mortgage broker (Mortgage Banker) works on your behalf to qualify you with the most competitive lenders in the nation. Cash-out refinancing home mortgages are typically lent out with 15- or 30-year repayment periods; the one that’s right for you depends on your personal finances, your income, and the interest rate you can secure. Once you are qualified, completed the process and have purchased the property your lender will sell your loan to corresponding agency depending on the type of loan you get VA, Conventional, FHA, USDA, Etc.
Jumbo Cash-out Refinance Loan Credit Score Requirements
To refinance, you’ll usually need a credit score of at least 580. However, if you’re looking to take cash out, your credit score typically will need to be 630 or higher.
Jumbo Cash-out Refinance Funding Fee
If you borrow more than 80% of your home's value, you'll have to pay for private mortgage insurance. For example, if your home is valued at $200,000 and you refinance for more than $160,000, you’ll probably have to pay PMI. Private mortgage insurance typically costs from 0.55% to 2.25% of your loan amount each year. PMI of 1% on a $180,000 mortgage would cost $1,800 per year.
Talk with an Orbit Home Loan specialist if you're considering a Jumbo Cash-out Refinance.
Are jumbo mortgage rates higher?
Traditionally, when looking to refinance you must have a net tangible benefit. Although the benefit does not have to be a better rate this is a viable option to get a better rate. Make sure to work with your Orbit Home Loan Broker to figure out what the best option is for you.
Jumbo Cash-out Refinance v. Traditional Jumbos
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Talk with an Orbit Home Loan specialist if you're considering a Jumbo Cash-out Refinance