The new mortgage rule announced July 9th limiting refinance maximums to 80% of the home value has restricted some homeowners. The good news is there is still an alternative to get you 85% of your home value to help with debts, mortgage payment reduction or whatever else you could use your extra funds for.
The secret is the cash-back mortgage. With a couple of lenders allowing us to use a cash-back product for a refinance, we are able to get you up to 5.5% cash-back on top of your mortgage. Take a look at the example below to see how a cash-back refinance product can get you the extra funds you need.
Home Value: $300,000
Max Refinance Limit 80%: $240,000 (maximum mortgage amount)
5.5% Cash Back of mortgage amount: $13,200
Total Cash out of Refinance: $253,200 (approx. 84.4% of home value)
Monthly payment: $1316*
The upside is you get more cash out from your refinance and you can also take advantage of a 30 year amortization as the mortgage is un-insured making your payments a bit lower. The fine print of the cash-back product is it comes with a higher interest rate, but it’s only about 2% higher than best rates and mortgage payments are still manageable.
Keep in mind; there are some minimum credit and income requirements for cash-back products and cash-back doesn’t just apply to refinancing; it is also available for purchases. Don’t hesitate to contact The MortgageGirls to see if you qualify for a cash-back mortgage and how you can take full advantage of it.