Cash Out Refinance Payment Formula:
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A cash-out refinance replaces your existing mortgage with a new loan for more than you currently owe, allowing you to receive the difference in cash. This calculator helps determine your new monthly payment after the refinance.
The calculator uses the standard loan payment formula:
Where:
Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term.
Details: Understanding your new payment helps evaluate whether the cash-out refinance makes financial sense and fits within your budget.
Tips: Enter your current loan balance, desired cash-out amount, new interest rate, and loan term. All values must be positive numbers.
Q1: What is cash-out refinancing?
A: It's when you take out a new mortgage for more than you owe on your current loan and receive the difference in cash.
Q2: What are typical uses for cash-out refinancing?
A: Common uses include home improvements, debt consolidation, education expenses, or major purchases.
Q3: How does this differ from rate-and-term refinance?
A: A rate-and-term refinance only changes the interest rate and/or term without taking additional cash out.
Q4: What costs are involved in cash-out refinancing?
A: You'll typically pay closing costs (2-5% of loan amount) and may get a higher interest rate than standard refinancing.
Q5: When is cash-out refinancing a good idea?
A: When you need funds for important purposes and can secure a better rate than other financing options.