Conventional Cash Out Loan

Conventional loans tend to provide the best terms to borrowers with good or excellent credit and that intend to cash out 80% or less of their home equity.

The most notable advantages of a conventional cash out loan are:

• You will not be required to pay any mortgage insurance.
• The mortgage rates are almost always lower on a conventional loan than an FHA loan.
• Conventional loans are the only cash out program that allows investment properties or second homes to be refinanced with cash out.
• Excellent 30 year and 15 year fixed rate options.

Amortization Schedules for Conventional Cash Out Loans:

Conventional offers both standard 30 year and 15 year loan schedules.  These are both available as either a fixed rate or adjustable rate mortgage.  The 30 year allows for a lower payment, but with a higher rate and more interest paid overtime.  The 15 year loan is best for paying off the mortgage sooner, and with less money spent on interest.

Frequently Asked Questions 

My home is paid off in full, can I cash out refinance?
Yes, you can cash out refinance on a paid off property.  As long as you meet the debt-to-income ratios for the new mortgage, and do not have excessive “payment shock” from suddenly taking on a large new mortgage.  If you meet the regular guidelines, you should be able to qualify.

Can you switch from an FHA loan to conventional loan?
Yes, if you would like to switch from an FHA loan to a conventional mortgage and cash out refinance, this is allowed. As long as you have established enough equity, and meet the other requirements, you can cash out up to 80%.

Is it possible to do a debt consolidation cash out refinance?
Yes, you may consolidate your debts when you cash out refinance.  You can do whatever you choose to do with the money.  If you would like to have your debts paid off at closing, this can be arranged.  Or, you can be wired the money and can pay off the debts you choose to pay off on your own.