How Does a Cash Out Refinance Work in Denton Texas

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How Does a Cash Out Refinance Work in Denton Texas

ripcordwes

Cash Out Refinance in Texas
Wondering How a Cash Out Refinance works in Texas? If you have Equity in your North Texas Home you may be in a position to pull Equity out of the Property and use the cash to purchase an Investment Home, Make upgrades to your current property, or do something else with it, it’s your money after all 🙂

You must leave 20% Equity in the Property when you proceed with a Cash out Refinance in Texas.
I use the example of the 1st home I ever purchased in Hurst, Texas near DFW airport. I boutght the property for $136,000 in 2015. It needed quite a bit of work. In fact I had to spend $14,000 to get it livable before I moved in with my wife.
The home is worth around $230,000 now in 2020. I sold it a few years ago but If I wouldn't have I would stand today with quite a bit of equity in the property as I would only owe $123,000 on the original mortgage.
This is How a Cash Out Refinance Works in Texas:
1. Order an Appraisal. This costs about $550ish
If you desire to get the most cash out of your property in the form of Equity the maximum loan amount is 80% of the Appraised Value.
Let's assume the Appraisal comes back at $225,000.
This means we $180,000 is the maximum loan amount ( $225,000 * .8)
We now take the new loan amount of $180,000 and subtract the principal balance of $123,000.
If you want to pull out the maximum amount of Equity without coming to the closing table with any money out of pocket I would subtract the closing costs from the loan amount as well.
$180,000 – $123,000(remaining loan balance) – $7,000 (Closing costs)
= $50,000 cash in hand
In this example I could pull $50,000 worth of Equity from my home.
This is just one way property ownership can help you achieve your goals, call me at 817 781 9392 or visit me in Denton, TX off the Square: 100 W Oak Street, #G-102 Denton, TX 76201