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are interest rates higher if you do a cash out refinance

by michellelver290989 from Pearl City, Hawaii. Apr 23rd 2015 Reply


KIYOSHI INUI (Kiyoshi)
#504 ranked lender in California - 106 contributions

Typically unless you're under 60% Loan to Value, using a VA Loan or an FHA Loan.

Apr 23rd 2015
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Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

For the most part yes. There is an added risk layer which the end investor will charge a risk based pricing adjustment to the rebate being paid to the lender.

Apr 23rd 2015
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Daryn Ogino (Daryn_Ogino)
#30 ranked lender in Hawaii - 7 contributions

Hi Michelle,All answers above are correct. However the extra cost is typically marginal in respect to what you are doing with the cash out. For example, if you are using the money to payoff high interest consumer debt, then the value of interest savings and increase in monthly cash flow usually outweigh the cost of the cash out. A good loan originator will be able to assist in laying out the costs vs. savings, and from there it is your choice on whether it is worth the plunge. Have a wonderful day!

Apr 23rd 2015
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Alan Van Zee (alan@hawaiimortgage.net)
#32 ranked lender in Hawaii - 9 contributions

Michelle,As stated by someone earlier, unless your loan to value is under 60%, or it is a VA loan, the COSTS are higher at the same interest rate versus a refinance where you don't take any cash out.It is important to note that with higher credit scores, the higher costs are not significant.

Apr 23rd 2015
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,045 contributions

Cash out refinance transactions do represent a more "Risky" loan for the lender, so they are priced accordingly.. however, if your loan to value is below 60%, then there is usually no pricing hits that makes it more expensive.. Closing costs should be no different whether your taking cash out or just doing a rate and term refinance.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Apr 23rd 2015
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,228 contributions

As stated, partly depending on the loan to value

Apr 23rd 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,565 contributions

Yes, no, and maybe... It really depends on the overall picture, and your loan-to-value of the loan you are doing. A low loan-to-value (under 60%), there is probably no change. A high loan-to-value (80%), then it is common to see about .125% higher because of the risk. Then FHA and VA usually have the same rate for cash out refinance as a rate and term only refinance.

Apr 24th 2015
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,109 contributions

They can be depending on your loan to value (loan amount divided by your homes value) and your credit score.

Apr 25th 2015
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