5 Reasons to Get a Cash Out Refinance

Your Home’s Equity Can Help You Get Cash

A cash out refinance lets you replace your current mortgage with a new loan for a higher amount, then get the difference in cash at closing. For example, if you currently have a $200,000 mortgage, you may be able to refinance for a $250,000 mortgage and get $50,000 in cash at closing.

What can you do with cash out refinances? Here are some common reasons homeowners refinance and get cash;

Can You Consolidate Debts with a Cash Out Refinance?

Yes. You can often use cash out refinances to help you consolidate debts—especially when you have high-interest debts from credit cards or other loans. That’s because the interest rates on mortgages are often much lower than the interest rates on other kinds of debt. This means that you can lower the amount of money you’ll pay in interest each month, then apply the savings toward paying down your debts.

Paying your bills can be easier when you consolidate debts, too. Instead of paying several different bills each month, you may be able to pay just one.

Can You Pay for Home Improvements with a Cash Out Refinance?

Yes. Paying for home improvements and repairs is a popular use of cash from refinancing. You can pay for building an addition, finishing an attic or basement, remodeling kitchens and bathrooms, and making major repairs to roofs, foundations, plumbing systems, electrical systems, and heating and cooling systems. You can also use the cash to pay for new paint and carpets, new appliances, and other home refreshes.

Keep in mind that you don’t have to use the cash for just one thing. You could apply part of the money to the cost of home improvements and the rest to debt consolidation.

Can You Pay for College and Investments with a Cash Out Refinance?

Yes. You can spend the money on education. Paying for education can be a good use of the cash from your home’s equity, because it can help you and your family prepare for professional success. You can also use the cash from refinancing to start your own business, buy a rental or investment property, or help pay for other major goals.

Can You Lower Your Interest Rate with a Cash Out Refinance?

Yes. It may be possible to lower your mortgage interest rate with cash out refinancing. That’s because it involves getting a new mortgage with a new rate and terms. Depending on your existing loan’s rate and current mortgage interest rates, you might be able to get a better rate when you refinance.

This is one thing that makes cash out refinances different from HELOCs and home equity loans. These are both types of second mortgages with their own rates and terms. When you get these loans, the terms of your current mortgage stay the same.

Can You Change to a Fixed-Rate Loan with a Cash Out Refinance?

Yes. You can change from an adjustable to a fixed rate when you refinance. You may also be able to change the number of years you have to pay your mortgage off (this is called the loan’s "term").

Increasing the number of years can make your payment lower, but it may cost you more money in interest over the life of the loan. Decreasing the number of years might increase your payment but could help you save money on interest.

What Else Do You Need to Know About Cash Out Refinances?

You’ll need a significant amount of home equity to qualify for cash out refinancing. You’ll need to apply for a new mortgage, meet credit and other financial requirements, provide documents, and pay closing costs.

When you refinance your mortgage to get cash, your minimum monthly payments may increase. You may pay more in interest over the life of the loan, since you are increasing the amount of money you owe, too.  Source

3 Ways to Take Advantage of your Home’s Equity

You’ve lived in your house for a few years or more and have seen prices going up and up. While you love your house, there are a few things you would change: the kitchen could use new countertops, the bathroom needs updated tile or maybe you need another whole bathroom. How can you do the things to your house you want to without sacrificing the vacation you’ve been saving for all year? Equity. Specifically, your home’s equity.

Your home’s equity can be used for many things including home additions, debt consolidation, adoption expenses, or even an extravagant vacation. As a rule of thumb, equity loans are generally made for up to 80% of your home’s equity, and your credit score and income are also considered for qualification. Most loans require upfront costs such as origination fees, titles, credit reports and appraisal fees. You could also see savings on your taxes; based on how you use the funds, the interest paid can be tax-deductible (consult with your tax advisor).

Three common ways to take advantage of your equity;

1.) Refinance with cash out

Refinancing with cash out involves taking out a new mortgage for the current value of your house to pay off your old mortgage and giving you “cash” back for the amount you have in equity. Most lenders require that you maintain a certain amount of equity in your home (usually up to 20% of the value). In rising interest rate environments, this type of loan is not as favorable as other home equity products because higher interest rates + higher mortgage means higher payments. Not to mention, if you obtained a mortgage in the last several years, there’s a good chance you already have a historically low-interest rate.

2.) Home equity loan

A home equity loan is a loan that is taken out against the equity you have in your home. In essence, your home is the collateral for the loan. The loan money is paid in one lump sum, usually has a fixed rate, and a fixed term for payback (usually 5-30 years). With the fixed amount borrowed, fixed rate and fixed term for payback, payments are the same each month throughout the life of the loan. Home equity loans are ideal for homeowners who have one big project or know up front the expenses that will need to be paid.

3.) Home equity line of credit (HELOC)

HELOCs are like home equity loans in the way the amount that could be borrowed is calculated. The main differences are that HELOCs most often have a variable rate, a dedicated draw period (the period of time, usually 5-10 years, where you can withdraw HELOC funds), and a dedicated repayment period (usually 10-15 years). With a HELOC, you withdraw money as you use it and pay interest only on the money borrowed (like a credit card). This type of loan is generally favored for homeowners who have multiple projects or needs that will occur over a span of time. 

During the draw period, payments are usually interest-only payments and during the repayment period, payments are made on principal and interest. Because of the variable rate, possible fluctuations in the amount borrowed, and the differences in payments during draw and repayment periods, the monthly amount due varies. Source

Interest Rate Buydowns: Permanent vs. Temporary Buydowns

Many would-be homebuyers are feeling the pinch from rising interest rates, but you don’t have to! APM has buydown options to help you reduce your mortgage interest rate and get you the lowest monthly payments possible. Interest rate buydowns are the key to lower interest rates, a smaller monthly mortgage payment, and saving you money.

The current housing market has kept many buyers on the sidelines. When interest rates were low, competition was fierce, and prices were high. With higher interest rates today, it’s harder for buyers to qualify. And even if they can qualify, the idea of a higher mortgage payment can be cause for pause. That’s why APM provides solutions for borrowers with permanent or temporary interest rate reduction options. Both temporary and permanent rate buydowns provide opportunities to reduce your monthly payments.

Temporary Buydowns

APM offers borrowers two temporary buydown programs. The first is a 3-2-1 buydown, where the interest rate is reduced by 3 percentage points the first year, 2 percentage points the second year, and 1 percentage point the third year. You can read more about this program by clicking here.

APM also offers a 2-1 buydown. This program reduces the interest rate by 2 percentage points during the first year and 1 percentage point the second year of the loan.

At the end of your buydown term, the interest rate will adjust to the original rate (the full interest rate that you locked in when you bought your home). It will stay at this rate for the duration of the home loan or until the loan is refinanced or paid off.

These programs are great options, because temporarily lowering your interest rate allows you to gradually work up to making the full payment. This can take massive pressure off you as a new homeowner.

As we know, interest rates don’t stay stagnant; they rise and fall and change direction. If interest rates ever fall to a level that makes sense for you, you can consider refinancing.

And here is even better news: The money for the temporary buydown goes into an escrow account and is applied to your loan every month during the buydown period. If you refinance or sell during that period, the unused portion gets applied to your home loan, reducing the balance of your loan.

This type of strategy allows you to take advantage of today’s buyer’s market—one in which sellers are much more open to concessions and negotiations than they were even six months ago. You will also face less competition, which means you have a better chance of making a successful bid on your dream home. 

Having your mortgage lender provide a pre-approval that incorporates buydown scenarios to include with your offer can also help secure those seller concessions to pay for the buydown!

Permanent Buydowns

Our second interest rate buydown option is a permanent buydown. This type of buydown lasts for the entire loan term. With a permanent mortgage rate buydown, you pay a fee known as discount points to lower your interest rate for the life of your loan. You can purchase as little as 0.125 of a point or as much as 4 points, depending on the loan program.

Each point is equal to 1% of your loan amount, and this fee is due at closing. For example, if your loan amount is $500,000, then 1 point will cost $5,000. It’s best to determine how long you want to remain in your home before investing in a permanent buydown. This is to ensure that you can recoup the upfront costs through a lower payment amount over time. The breakeven point on permanent buydowns will depend on how much you have contributed and the overall monthly savings. Your APM Loan Advisor can give you a breakdown of your specific scenario to ensure that you make the right decision. If you’re planning to stay in your home for 10-plus years, a permanent buydown can save you a lot of money. However, if this home is more of a stepping stone for you, it may be wiser to choose a temporary buydown that can yield some good savings for 12 months or 24 months. 

With a lower monthly payment amount, you can put the money you save toward your home, credit card debt, student loans, or an emergency fund. A lower interest rate also means you can qualify for more house, which can be a big deal in many markets. 

Benefits of Interest Rate Buydowns

Whether you choose a temporary or permanent rate buydown, there are benefits to you:

• Lower payments: By paying a lump sum upfront, buyers can secure a lower interest rate for the initial years of the mortgage—or permanently. This relief makes homeownership more affordable initially and over the long term.
• Improved affordability: Lower monthly payments can enhance a buyer’s ability to qualify for a mortgage and to afford a more expensive home. This can be particularly beneficial for first-time homebuyers or those with tight budgets.
• Financial relief: Interest rate buydowns provide relief by reducing the financial strain in the early years of homeownership. This can be helpful for buyers who anticipate an increase in income down the road or will have other financial priorities during the initial years of the mortgage.
• Easier budgeting: Predictable and lower monthly payments make it easier for buyers to budget and manage their finances. This stability can be especially valuable for those who prefer to make consistent payments while adjusting to the responsibilities of homeownership.
• Potential long-term savings: Depending on the buyer’s financial situation and how long they plan to stay in the home, the savings from lower interest rates can outweigh the upfront cost of the buydown. This can result in long-term financial benefits.

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Planning For Your Home Down Payment

While finding your dream home is exciting, saving up the money for a down payment can be a bit intimidating. An old standard for homebuying was that you should save at least 20% for your down payment. According to NerdWallet’s 2026 Home Buyer Report, only 37% of Americans know that a 20% down payment isn’t required to buy a home. Times have changed and so has the average down payment amount. Some programs now require down payments as low as 3%.

Saving for a down payment can take some critical thinking and planning. Follow the steps below to plan for your home down payment.

Timing is everything

Is now the right time to buy? The Federal Open Market Committee (FOMC) continues to hold rates steady, making mortgage rates hover around 6%. Additionally, home price growth has slowed nationally, bringing the cost of homes down slightly compared to previous years. Housing stock supply has risen, yet overall inventory remains below pre-pandemic levels.

Regardless of the current economic and housing environment, the most important items for home searchers will always be stable income and a good amount of savings. If you have those and your future includes a home of our own, house shopping may still work for you.

Going into your house hunt with an idea of what to expect and knowing your budget can help you create a solid game plan towards saving up for home ownership. Below are some tips for planning your down payment;

1. Understand financing and the big picture

You already know that purchasing a home is a substantial investment, and you’ll need to ensure you can afford the monthly mortgage payments. Unless you have a large amount of cash saved, you will most likely need to get a home loan, known as a mortgage. A home purchase loan translates into monthly mortgage payments over the course of a set amount of time (15, 20 or 30 years are typical loan terms), during which you pay down the loan balance and become a full owner of your property. Because a mortgage is a loan from a mortgage broker, bank or lender, interest will also be applied to the amount of money you’ve borrowed.

So, to plan your savings goal, you’ll also want to consider the amount of money you’ll need to have for a down payment as well as other associated expenses, such as a home inspection costs, appraisal fees, closing costs and how much interest will end up costing you over the life of the mortgage. And, while not directly related to the purchase cost, it can be helpful to save a little extra to account for expenses like home maintenance, improvements and repairs.

While you don’t always need to supply a 20% down payment due to programs and resources available for qualified borrowers, the higher your down payment, the better it may be for future finances. With a larger down payment, your monthly mortgage payment will be lower, and you may qualify for better rates or terms. A larger down payment allows you to retain full ownership of the home faster and can save you money through a lower interest rate on the mortgage.

2. Determine a goal

You should take a look at your finances to determine what kind of home is affordable. A financial expert or mortgage loan consultant can help figure out the best budget for your current financial situation. In addition, online calculators can help you estimate how much house you can afford. Also, a mortgage loan consultant can be helpful in looking at:

• A pre-approval for a home loan
• Which loan type you prefer or are qualified for
• Whether mortgage insurance will be required
• An idea of how much the closing costs and total monthly payment will be

You can also reach out to real estate agents in your area to ask about the average listing and selling prices of homes in different neighborhoods you’re considering. If you know you want to move to a specific area and homes typically sell for $300,000, you can use that information to tailor a down payment goal specifically to that amount.

In this scenario, a 20% down payment would equal $60,000 and a 5% down payment would be $15,000. Again, those numbers are only the down payment—the other expenses of home buying, like closing costs, would also need to be accounted for.

3. Find ways to save

When you are focused on saving for a down payment, look at ways to decrease expenses and increase income.

A popular strategy for saving money is to automatically put a portion of your paycheck into your savings account. You may find you miss the money less if you don’t get a chance to see it in your checking account in the first place.

Even if you already have a budget, it’s a good idea to reevaluate to see how much money is going in and out of your household every month. Make a list of all required expenses, such as rent, food and monthly utility bills. Any extra expenses should be listed in order from most to least costly. By cutting out the least important expenses, you can develop a budget that helps you increase your monthly savings.

Temporarily increasing total income can also help you reach your down payment goal quickly. Your second stream of income could be something you like to do already, like freelance writing, creating and selling items online, or video tutoring. As you set a plan and start saving for your home down payment, keep your long-term dream in mind: finding the right home for you and your family. Source

Mortgage Terminology 101: What Every Home Buyer Should Know

Like any field or industry, a boatload of terms goes hand-in-hand with the mortgage world. For home buyers, it can be an overwhelming process, with unfamiliar terms being flung at you left and right. But just because it can be a lot at once doesn’t mean it has to be. Here is a list of common words and terms used during the home buying process...

Mortgage Terminology

Borrower / Co-Borrower: This is a simple one to start out with. YOU are the borrower, the consumer! A borrower is the person applying for the loan in order to purchase their property. This is how your lending team will refer to you throughout the process.

Earnest Money: This is a good-faith deposit that you’ll send to the seller. It affirms your desire to purchase the property without backing out. The earnest money may also be applied to closing costs or the down payment once you reach closing.

Equity: Equity is the amount your property is currently worth minus the amount of any existing mortgage on your property. 

Home Equity Line of Credit (HELOC): This is a line of credit secured by your home’s equity that gives you a revolving credit to use for large expenses (home renovations, high-interest debt, student loans, etc).

Annual Percentage Rate (APR): APR is the cost of credit articulated as a yearly rate and is NOT an interest rate. It’s a way to measure the total cost of credit. 

Pre-approval vs. Prequalification: Obtaining a prequalification is a quick estimate based on very basic financial information. A pre-approval is a much more thorough, valuable process that checks your credit, income, assets, and debts. A pre-approval shows sellers and lenders that you’re serious about home buying.

Appraisal: An analysis performed by a qualified professional that estimates the value of a property by evaluating the quality and comparing it to similar homes.

Down Payment: This is the amount you pay toward the home upfront. Many assume they have to put down 20% of the purchase price, but it can be much lower (or waived entirely!) if you qualify for specific loan options and down payment assistance programs.

Closing Disclosure (CD): Your CD is a document that breaks down mortgage fees, final terms, and closing costs. You will receive an initial CD and a final CD. You must sign your CD three business days prior to closing.

Closing Costs: Expenses incurred by buyers and sellers when transferring ownership of a property; these typically include property taxes, origination fee, title fees, and escrow costs, but these costs will vary.

Debt-to-Income (DTI) Ratio: The ratio of how much you make versus how much you owe: your monthly debt payments divided by your gross monthly income.

Loan-to-Value (LTV) Ratio: This ratio is the measure comparing the amount you are financing with the appraised value of the property.

Private Mortgage Insurance (PMI): Most lenders generally require extra mortgage insurance for a Conventional Loan if your down payment is below 20%.

Fixed-Rate Mortgage vs. Adjustable Rate Mortgage (ARM): For fixed-rate loans, the interest rate is set and will NOT change during the term of the loan. For ARMs, the point is that the rate fluctuates with the market.

Conventional Loans: The most common mortgage loan, it is not insured or guaranteed by the government and often offers more flexibility. Terms range from 15 to 30 years.

Government Loans: Government-backed loans is an affordable housing loan that the federal government insures or guarantees. VA, FHA, and USDA Loans all fall under this umbrella.

Underwriting: This is the evaluation of a loan application’s risk for the lender, which involves an analysis of the borrower’s creditworthiness and the quality of the property itself.

Homeowners Insurance: You’ll need insurance to pay for losses and damages to your property. The lender requires this to be set up before your loan closes. This is different from PMI. All mortgages require this insurance.

Homeowners Association (HOA): An HOA manages shared expenses like maintenance costs for planned subdivisions, condominiums, or other organized communities.

Refinance: A common action to restructure your current loan. If rates drop, you can refinance to a lower interest rate to reduce your monthly payment. Many also refinance to access their equity for various reasons, like remodeling projects.

Title Company: A third-party company that works with the borrower and lender to ensure that the house title is transferred smoothly and legally.

Clear to Close (CTC): The golden word in mortgage processing! It means that your loan has met all underwriting conditions and it’s cleared to close.

We hope this has been a helpful rundown of mortgage industry lingo. As a home buyer, you want to head into the loan processing with confidence and knowledge. Understanding basic terms of your home loan will not only help clear away any confusion, but it could potentially save you time and money down the road. Good luck on your homeownership adventure!

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Rates Are Lower - Let's Review Your Options

With rates trending lower, now is a great time to revisit your mortgage strategy.

Even a small rate change can make a meaningful difference in your monthly payment, long-term savings, or equity position. Whether you’re considering refinancing, purchasing, or simply want to understand what’s possible, a quick review can give you clarity and confidence.

I’m offering a complimentary mortgage review and consultation to help you explore your options and determine what makes the most sense for your goals.

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