Leverage home equity for ADUs, renovations, debt consolidation, or investments. See how cash‑out refis work and how to compare them to HELOCs.
Published: November 2025
If your equity has grown, a cash‑out refinance can convert part of it into funds for projects and plans—while rolling everything into a single new mortgage.
How Cash‑Out Refi Works
• New Loan Amount: Replaces your current mortgage with a larger one; the difference pays out at closing.
• Payment & Rate: Your payment resets based on the new balance, rate, and term.
• Use Cases: ADU builds, renovations, education, debt consolidation, business growth, and reserve building.
When It Fits
• You want one fixed monthly payment rather than a second lien.
• Your current rate/term and horizon make a reset sensible.
• You prefer closing once and funding the full project upfront.
HELOC Vs Cash‑Out Refi
• HELOC: Second lien; flexible draws; typically, variable rate risk.
• Cash‑Out: Single new mortgage; potential payment certainty; consider closing costs and breakeven.
What To Prepare
• Income/asset documentation and credit review.
• Property value (appraisal may be required).
• Project plan (if improving the home): timelines, quotes, contingency.
6‑Step Checklist
1) Goals & Amount — Define the exact use and required budget (with 10–15% cushion).
2) Scenario Modeling — Compare new payment and total cost to keeping your current loan + HELOC.
3) Breakeven Math — Weigh closing costs vs. savings or benefits over time.
4) Term Strategy — Consider shorter or longer terms to fit cash flow.
5) Appraisal Readiness — Tidy, document improvements, list upgrades.
6) Lock & Close — Coordinate payoff of the old loan and receipt of funds.
FAQs
Q: Will I need private mortgage insurance (PMI)?
A: That depends on your new loan‑to‑value and program. We’ll review options.
Q: Can I take cash out on an investment property?
A: Often yes, with different LTV and pricing limits. We’ll map eligibility.
Q: How fast can I access funds?
A: Timing varies by appraisal/underwriting and any required rescission periods.
Cta
Want to compare cash‑out vs HELOC side‑by‑side? Apply with New Wide Lending at /apply.
Compliance: Program availability and terms subject to lender approval.
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disclaimer
Subject to credit approval. Not a commitment to lend. Programs, rates, and terms are subject to change. Licensed in CA, TX, FL & GA. CalDRE #01928649 • NMLS #1339357. Equal Housing Lender.