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Michael Kirkutis

Can you explain what is a cash out refinance?

Thursday, September 19, 2013 - Article by: Michael Kirkutis - MAK Mortgage Company, Inc. - Message

A cash out refinance is when you take out a larger mortgage on a property than is already in place. Because you are getting a mortgage amount which is an increase over anything that is in place, you will yield what is called cash out funds from the refinance transaction at closing. The amount of cash out funds you receive will vary based the difference in the new loan versus any payoffs of existing liens, if any, on the property plus the payment of settlement charges for the residential closing. For example, let's suppose you have a $100,000 1st mortgage on a single family property and you close on a new refinanced $200,000 1st mortgage with, for example, $6,000 in total settlement charges. You will net at closing the $200,000 - $100,000 - $6,000 = $94,000 net cash out funds to you at closing. As always, the cash out refinance transaction will be subject to any mortgage lender underwriting guidelines and criteria. Michael A. Kirkutis, Mortgage Loan Originator, CT DOB NMLS #111599, MAK Mortgage Company, Inc., 31 Woodland Street, Suite MMA, Hartford, CT, 06105, CT DOB NMLS #103552,, 860-724-8097.

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