No cash out

[Rahman Ray]

Hello I’m looking at a bank that offers a rehab loan. It’s list that there is no-cash out allowed. Am I correct in thinking that that’s not a good thing?

[Joe Villeneuve]

That's a rate and term loan.  All that does is replace your current debt with better terms.  The idea is to reduce the monthly payment by either basing the loan on a lower base amount (reduce balance from the original loan), a lower interest rate, or a combination of both.

[Rahman Ray]

Thank you, Joe