ppµç×Ó¹ÙÍø

Speak with one of our Personal Bankers to get an initial idea of your eligibility, or start your application onlineÌý. Here are a few things we look for:
- Credit score of at least 680
- History of responsible credit use
- Verifiable employment and income
- Debt-to-income ratio (DTI) less than 43%

Refinancing your home mortgage allows you to pay off your original mortgage with a new loan. Typically, people refinance their original mortgage loan for one or more reasons:

• Earn a better interest rate,
• Reduce monthly payments by extending the repayment term of the loan, or
• Reduce interest charges paid over the life of the loan by shortening the repayment term of the loan.

A conventional refinance loan will replace the outstanding balance on your current mortgage with a new loan and potentially a new rate and term. A cash out refinance does the same thing, but it also allows you to take out an additional amount from your home equity that you can receive as a lump-sum payment. The additional amount will be included in your new loan balance. This will give you a single monthly payment for refinancing and borrowing cash from your home equity.

Typically, lenders will use the combined loan-to-value (CLTV) ratio to understand your ability to take on new debt. To generate your CLTV on your own, follow these steps:

• Add up the balances on all your existing home loans, such as first mortgages, second mortgages, or home equity lines of credit. This is your combined loan value.
• Find the estimated value of your home. You can use an online tool, compare the sale price of similar homes in your neighborhood, or pay for an official estimate.Ìý
• Divide your combined loan amount by your estimated home value to calculate your current CLTV.

Once you know your current CLTV, you need to find out the maximum CLTV allowed by your cash out refinance lender. Typically, lenders cap lending at a specific percentage of your CLTV. For example, ppµç×Ó¹ÙÍø allows for loans up to 90% of CLTV.

Use your lender's maximum CLTV percentage and multiply that by your current home's value to calculate your maximum loan amount. When you subtract your existing mortgage balance from your maximum loan amount, you will see how much cash you may be able to obtain through a cash out refinance.

Let's use the following example to walk through calculations for a cash out refinance (you can substitute your home's values in the calculations below or use ourÌýcash out refinance calculator):

• A homeowner owes $100,000 on a first-lien mortgage loan and $45,000 on a second-lien home equity loan.
• The current home value is $400,000.
• The combined loan amount is $100,000 + $45,000 = $145,000.
• The current CLTV is $145,000 / $400,000 = 36%.

With ppµç×Ó¹ÙÍø, homeowners can borrow up to 90% CLTV, so 0.90 x $400,000 = $360,000 may be able to be taken out against the current value of the home.Ìý

In this example, since $145,000 is owed on existing loans, the maximum cash out value possible with a ppµç×Ó¹ÙÍø loan is $360,000 - $145,000 = $215,000.Ìý

While borrowers do not have to take out the full amount available, finding these values may help homeowners understand borrowing limits before applying for a loan.Ìý