Put Your Home Equity To Work In South Dakota
Cash-out refinancing lets you access the equity you’ve built, and put it toward the things that matter most. Our loan officers in Sioux Falls and Brookings will walk you through every option.
What is cash-out refinancing?
Cash-out refinancing replaces your existing mortgage with a new, higher loan amount, allowing you to access the equity you’ve built through appreciation and regular monthly payments. The difference between your old loan and the new one comes to you in cash, available for paying off debt, funding home improvements, or essentially any purpose that requires a lump sum.
EXAMPLE: HOW IT WORKS
Current mortgage balance
$200,000
Current home value
$400,000
Available cash (approx.)
Up to $120,000
In this example the homeowner has $200,000 in equity. Most lenders require you to keep at least 20% equity after the refinance, so the maximum new loan is $320,000. That leaves up to $120,000 available as cash minus closing costs, which can be financed or paid upfront.
Common ways South Dakota homeowners use cash-out refinancing
Debt Consolidation
Pay off high-interest credit cards, personal loans, or auto loans, and consolidate everything into one lower monthly payment at your mortgage rate.
Home Improvements
Fund a kitchen remodel, new roof, addition, or any project that adds value to your home. Get contractor estimates before you apply so you know exactly how much you need.
Major Expenses
College tuition, medical expenses, investment opportunities, and cash-out refinancing give you access to a large lump sum without the interest rates of personal loans or credit cards.
Things to consider before you apply
There are minimum credit score requirements for a cash-out refinance, and the higher your score, the easier it is to qualify and the better your rate options. Talk to your loan officer before applying so you know where you stand and whether any preparation would help.
Your credit score matters.
If you’re paying off debts, gather payoff statements showing your current balances. If you’re funding a renovation, get contractor estimates. Coming in with specific numbers makes the process faster and ensures you’re not borrowing more or less than you need.
Know how much you need.
Your interest rate will change.
The new rate on your cash-out refinance could be higher or lower than your current rate, depending on market conditions and your credit profile. Your loan officer will help you model out whether the new payment makes sense, including whether you can consolidate other debts and shorten your effective payoff timeline.
An appraisal is required.
A mortgage appraisal establishes the current market value of your home, which determines your equity position and how much you can borrow. The appraised value drives the math, so the amount available to you depends on what the appraisal comes in at.
There is a 3-day recission period.
After closing, federal law gives you 3 business days to cancel the transaction. During this window, the cash funds are not yet available. Once the 3 days have passed, the funds are disbursed. Your loan officer will walk you through this timeline so you can plan accordingly.
*By refinancing your existing loan, your total finance charges may be higher over the life of the loan. Copyright©2022 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.
ready to access your homes equity?
Our loan officers in Sioux Falls and Brookings are here to help you understand your options. Let’s look at your numbers together.
Call Us (605) 906-1020