What is a Cash-Out Refinance?
In real estate, equity refers to the dollar amount that the property owner has paid off on their loan. A crafty property owner can refinance their first mortgage into a loan that is more than they currently owe. They are entitled to take out the remaining difference as cash – this is known as cash-out refinancing.
Cash-Out Refinancing and Real Estate Investments
Many house-flippers use cash-out refinancing for multiple purposes:
- Purchasing power. Refinancing your mortgage can give you the capital necessary to invest in multiple properties at once.
- Home rehab. You can use the cash for home improvements that will ultimately make your property sell for more.
Cash-Out Refinancing and Hard Money
When it comes to cash-out refinancing, many real estate investors choose to borrow money from private money lenders as opposed to banking institutions for the following reasons:
- Although hard money loans may have a higher interest rate than a bank loan, they are typically approved at a much faster rate.
- Higher rate of approval. Many banks turn down real investment loans simply because it will not generate them enough money. A private money lender, on the other hand, is willing to give a chance to the same people that the banks neglect.
Are You an Investor Who Needs a Hard Money Loan in Atlanta?
If you’re an investor who needs a hard money loan in or around Atlanta, we may be able to help you. Check out our loan criteria to find out whether this type of financing is right for you, and be sure to explore our hard money loan FAQs.
You can apply for a hard money loan online or you can contact us at 404-814-1644.