Put your equity to work, thoughtfully.
A cash-out refinance can turn part of the equity you have built into funds for a real plan. Theresa Rolen lays the numbers side by side so you can see exactly what changes, and what it costs, before you decide.
A new, larger mortgage, and the difference as cash
A cash-out refinance replaces your existing mortgage with a new loan for more than you currently owe. You receive the difference at closing, minus costs, subject to qualification and the program's requirements.
It is still borrowing. The money comes from your home's equity, and it is repaid as part of your mortgage, which is why it is worth looking at more than one version before you commit.
Refinance vs. cash-out refinance
Both replace your current mortgage. The difference is whether you also borrow against your equity.
Refinance
Change the loan- The goal
- Adjust the loan itself, its term, structure or type.
- New loan amount
- Generally based on what you owe now.
- Cash at closing
- Not the purpose.
- Worth it when
- The new loan fits your life better than the one you have.
Cash-Out Refinance
Change the loan + access equity- The goal
- Replace the loan and use part of your equity for a specific plan.
- New loan amount
- Larger than what you owe now.
- Cash at closing
- The difference, minus costs.
- Worth it when
- The plan for the cash justifies the larger balance.
Only looking to change your current loan? See Refinancing.
Common reasons people ask
Home improvements
A kitchen that finally works, a renovation or a repair you have been putting off.
Consolidating debt
Folding certain higher-interest balances into one payment, when the comparison supports it.
Education
Tuition or other education costs your family is planning for.
A planned expense
A major cost you have already thought through, not an open-ended cushion.
The best cash-out refinances start with a clear purpose for the money.
Know the trade-offs first
- Your payment may go upBorrowing more than you owe now can raise the monthly payment rather than lower it.
- Your whole loan is newTerm, rate and payment are all up for discussion, so compare more than one version.
- There are closing costsCosts can sometimes be rolled into the loan. Theresa shows both versions so you can compare.
- Your home secures the debtConsolidating balances into your mortgage moves them onto your home. Make sure the plan makes sense.
Three steps, explained plainly
Compare scenarios
Theresa compares your current loan with options built around what you are trying to accomplish, with side-by-side payment scenarios.
Lock and appraise
Once you choose a direction, your rate is secured and any valuation and guideline requirements are completed.
Close and move forward
You sign, the old loan is paid off and the new one begins. Theresa guides each step so nothing catches you off guard.
Documents to gather
If your situation does not fit this list neatly, say so. Theresa will tell you what she actually needs.
- Current mortgage statement
- Homeowner's insurance information
- Government-issued ID
- Recent pay stubs and W-2s
- Tax returns, if self-employed
- Recent bank statements
Frequently asked
How is a cash-out refinance different from a regular refinance?
A regular refinance replaces your mortgage to change the loan itself. A cash-out refinance replaces it with a larger loan and pays you the difference as cash at closing, minus costs. More on refinancing.
Will my payment increase if I take cash out?
It can, because you are borrowing more than your current balance. Whether that is worth it depends on your new term and what the cash is for. You will see a before-and-after payment comparison before you decide anything.
Is the cash from a cash-out refinance taxed?
Cash from a refinance is generally treated as loan proceeds rather than income, but how it affects your specific tax picture depends on your circumstances and how you use the funds. Theresa will walk you through the loan side and recommends confirming the tax side with your accountant.
Do I need perfect credit to refinance?
No. Different programs look at credit differently. Share where your credit stands and Theresa will tell you honestly which paths are open and which might be worth waiting on.
Can I roll closing costs into the loan?
In many cases closing costs can be financed into the new loan rather than paid at the table. Theresa will show you both versions so you can see how each affects your payment.
How long does a refinance take to close?
Timelines depend on the program, whether an appraisal is required and how quickly documents come together. Theresa will give you a realistic expectation once she has reviewed your file.
Ask the Huntress
Tell Theresa what you are hoping to do and she will show you, in writing, what a cash-out refinance would change, and whether another option fits better.
(913) 705-0049Programs, rates and terms subject to change and credit approval. Not a commitment to lend.