Cashing Out Equity In Home

What Is Cash Out Refinance?

Cash Out refinance is a type of mortgage option that lets you take out a larger mortgage loan, use the proceeds to pay off your existing mortgage and receive the remaining funds as a lump sum. Banks typically accept cash-out loans for purposes like minor cosmetic renovations, debt consolidation, investing in shares, using equity as a deposit for your next property, or buying or investing in a business. There are loans that can be used for other purposes, though, such as to build a home, to purchase a specific property with a signed contract, or to refinance an existing home loan.

Before you start the process of cashing out your home equity, it’s important to determine how much equity you’ve built in your property. Using the calculator below, you can get a clear idea of your available equity. Once you know this, we’ll guide you through how much of it you can access, the requirements from lenders, and the best ways to use the funds. We’ll also cover potential risks and how to use your equity responsibly for investments or other financial needs.

Can I Cash Out?

Yes, you can cash out if you have built up enough equity in your property.

Use the home equity calculator below to determine your equity.

Disclaimer: This calculator is to be used as a guide to help you better understand your options. We have not assessed what options are suitable for your needs or if you meet other lending criteria that would allow you to access your equity. Any repayments quoted above are calculated using your current home loan balance over a term of 30 years. We strongly recommend that you make additional repayments and pay your loan off sooner. If you borrow over 80% of the property value, then you may pay an LMI premium.

The property equity calculator simply deducts the balance on your home loan from the estimated value of your home. Keep in mind that you can borrow only up to 80% of your home equity. Not sure how much your property is worth? We have written a guide to help you estimate the value of your home, so you can follow the guide to enter your property’s value in this calculator.

How Much Cash Out Is Acceptable?

Most lenders require evidence of the purpose of the loan if you’re releasing more than $10,000 to $50,000 as cash out. This requirement is particularly strict for people seeking a low-doc loan.

Our best lenders require you to disclose only the purpose of your loan and you don’t have to provide evidence.

Things To Remember Before Cashing Out Your Equity

Below are the most important points you need to keep in mind when thinking of cashing out your equity:

• Most lenders require you to maintain 20% of the equity in your home.
• All lenders do not have the same policies. The terms and conditions you had to follow with your previous loan could be different from those for the cash-out loan. So, look into the new lender’s policy before refinancing, to see if you are comfortable with the terms.
• Factor in the costs of getting a home loan. Some of the amount you cash out could be used to cover those costs.

Our Responsible Lending Commitment

We always endeavour to fully understand your needs and aim to offer you expert help to get the most suitable loan product available. Our mortgage brokers are committed to helping you engage with responsible lending practices. We won’t help you to get a loan unless there’s a clear benefit to you, and a low risk that you’ll misuse the funds.

How Can I Apply For A Cash-out Loan?

Please enquire online for free or dial 1300 889 743 to speak to one of our mortgage brokers who specialises in releasing cash out with a home equity loan.