What lenders look at
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash. To approve one, lenders review a few core things:
- Your credit score and credit history
- How much equity you have in your home
- Your debt-to-income ratio, which compares your monthly debts with your income
- Your record of on-time mortgage payments
You need a credit score of at least 620 for a CapCenter loan.
How much equity you need
Cash-out programs limit how much of your home’s value you can borrow. This is called the loan-to-value ratio, or LTV. Many conventional cash-out programs cap at about 80% of value, and limits vary by loan program, property type and number of units. Investment properties usually have lower limits. Your loan consultant can tell you what applies to your home.
How long you’ve had your loan
Many programs have a seasoning requirement: a minimum time you must have owned the home or held your current mortgage before you take cash out. For many conventional loans, that’s about 12 months. Rules differ by program, so ask before you apply.
Documents to gather
- Recent pay stubs and W-2s, or tax returns if you’re self-employed
- Bank and asset statements
- Your current mortgage statement
- Your homeowners insurance details
Having these ready can help your loan move faster.
Appraisal or valuation
Your home’s value sets how much cash you can take out. Many cash-out refinances need an appraisal, but not all. Some loans can use an appraisal waiver or another valuation method. When an appraisal is required, CapCenter covers it under ZERO Closing Costs (restrictions apply).
ZERO Closing Costs on your cash-out
CapCenter cash-out refinances on your primary home come with ZERO Closing Costs (restrictions apply; see Offer details). For a second home or investment property, ask your loan consultant whether ZERO Closing Costs applies. Escrow deposits and prepaid interest aren’t covered.
