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Self-Employed Mortgage Loans Fort Myers – Home equity is the current market value, minus any liens, such as a mortgage. A cash out refinance allows clients to tap into that equity and turn it into cash. Cash-out refinances can have many benefits, including consolidating debt. Self-Employed Mortgage Loans Fort Myers. If a borrower has a lot of high interest debt, they can use a cash out refinance to pay it off. Now, instead of paying a high-interest rate on their past debt, they pay a much lower rate with a residential mortgage. This can save a great deal of money in the long run. A cash out refinance can also be used for other expenses. Instead of using a credit card that has a high interest rate, borrowers can use a cash out refinance for home repairs or renovations, like building a swimming pool, updating the kitchen, or putting a fence around their backyard. The options of what you can do with the cash from a cash out refinance loan are endless. A common question that many clients have is, “How much money can I get if I do a cash out refinance?” The answer varies depending on the amount of equity you have in your house. In most scenarios, we recommend that you not borrow more than 80% of your home’s value. If you go above that amount, you will have to pay Mortgage Insurance. Mortgage insurance is an additional loan cost that you will have to pay monthly. Scenario 1: John Doe purchased a house 2 years ago for $200,000. He took out a mortgage for $160,000 and put $40,000 down for a down payment. Over the past 2 years, the value of his house has grown and it is now valued at $250,000. Unfortunately, John has accrued $45,000 in high interest credit card debt and wants to eliminate it. John called Mortgage Warehouse and his loan originator advised him to consider a cash out refinance. With the cash out refinance, John can increase his loan amount to get $45,000 to payoff his credit card balances.