Cash-out

• A cash-out refinance might enable you to use your home to obtain money from a mortgage lender. Loans that are backed with sufficient collateral could allow you to borrow the money that you need. Banks and mortgage companies that provide cash-out refinance loans will extend loan offers based on your qualifications and the loan-to-value ratio for your transactions. Each lender uses a formula to determine the risk level associated with cash-out loan transactions.
  
  

Equity

• The equity within your home and your credit history will be used to determine your qualifications for a cash-out refinance loan. The value of your home is used to compute the available equity and the amount of money that you can borrow. Liens against your home are deducted from the market value of your home to determine the available equity. The portion of available equity that you might be able to borrow will depend on your credit and income qualifications.
  
  

Appraisal

• An appraisal report will inform a lender of the style, features and value of your home. The market value shown on an appraisal report will typically reflect recent sales transactions within the vicinity. Your home's market value represents the opinion of a state-licensed appraiser who prepares an unbiased report, upon your lender's request. The appraisal value can greatly impact the amount of money that you may be able to borrow against your home.
  
  

Application

• To borrow money from the equity within your home, you will need to locate lenders in your area or shop online for a mortgage loan. To find the best deal, you should submit a loan application to several mortgage lenders. Income documents and your credit report will be requested during the loan application process. Some mortgage lenders may offer to refinance your current loan, provide a second mortgage loan or extend a home equity line of credit.