With a cash-out refinance, you can access the equity you've built in your home. You can use this cash for things like home improvements, college expenses or a new car. Many of our customers also choose to use the cash-out refinance to consolidate credit card debt.
Blanket Mortgage allows up to 90% Loan-to-Value on cash-out refinances for primary and second homes.
Here's how a cash-out refinance works
Say your existing house is worth $225,000 and you currently owe $150,000. You need $25,000 to pay off your credit card debt. You refinance your home loan with a mortgage of $180,000. Through the cash out refinance, you pay off your current loan of $150,000. You're left with $25,000 to pay off your credit card debt and $5,000 to use towards closing costs and other small purchases. By refinancing and paying off your credit cards, you now pay $1108 each month instead of $1,730. That's $622 cash savings each month.
* The above example assumes an original 30-year fixed rate mortgage of $155,000 with an interest rate of 7.75% and a monthly payment of $1110. As a result of regular monthly payments, the unpaid balance of the loan has been reduced to $150,000. The loan is refinanced with a Blanket Mortgage Company 30-year fixed rate mortgage of $180,000 with a monthly payment of $1108 and a Loan-to-Value ratio of 80%. The interest rate on the Blanket Mortgage Company loan is 6.25%. The annual percentage rate for the new loan is 6.322%. The example assumes that the credit card debt has an Annual Percentage Rate of 18% and requires a monthly payment of 2.5% of the unpaid balance.
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