Can someone explain how refinancing makes money?

1 Reply

Can someone explain how refinancing makes money?

How do you determine when it's a good time to refianance

Cash Out Refinance turns equity into cash. I believe this is what you are referring to. It works like this:

Current Property Value - $150,000

Outstanding Mortgage - $75,000
*you have good equity in the property, so you consider refinancing to have more cash on hand.

Cash Out Refinance w/ Lender is 80% LTV = $120,000

$120,000 - $75,000 = $45,000 (Cash in Hand)

Any questions let me know!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you