Home Equity and Refinancing
Money Management

What is cash out on mortgages?

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Wiki User
2009-07-30 16:33:44

If you refinance a property you own and take out a new loan for

more than the balance (plus allowed closing costs) of the previous

loan you will receive cash at the closing. That makes a mortgage

cash out. or.... if you own a property free and clear and want to

take out the equity in your property you can do this by taking out

a mortgage loan and the lender will give you the money at closing.

When you walk away from closing with usually more that 2% of the

mortgage balance as cash to you..that is considered cash-out.

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