Cash-Out Refinance

Use the equity in your home to fund home improvements, consolidate debt, or invest in your future—all while potentially lowering your interest rate.

Simplified Process

Often easier than cash-out refinancing

Lower Interest Rate

Reduce your monthly payments

No Cash Out

Keep your equity in your home

Change Loan Term

Shorten or extend your repayment period

Cash-out refinance rates vary and may be as low as competitive market levels for qualified borrowers. Contact us for today’s personalized rate.

What is a Cash-Out Refinance?

A cash-out refinance lets you replace your current mortgage with a new, larger loan—and receive the difference in cash. Rhode Island homeowners use this option to fund renovations, pay off high-interest debt, cover major expenses, or invest in long-term goals.

You’re essentially borrowing from the equity you’ve built, often at a lower interest rate than credit cards or personal loans.

Access Your Equity

Tap into the value of your home with a cash-out refinance. This option allows you to borrow against the equity you've built over time — the difference between your home’s current market value and your remaining mortgage balance. Most lenders allow qualified homeowners to borrow up to 80% of their home's appraised value, minus what’s still owed. Whether you're renovating, consolidating high-interest debt, or funding a major life event, accessing your equity can offer a flexible, lower-interest solution.

New Loan Terms

A cash-out refinance doesn’t just put cash in your hands — it gives you a brand-new mortgage. That means you have the opportunity to:

Lower your interest rate
Change your loan term (shorten to pay off faster or extend to lower monthly payments)
Switch to a fixed-rate mortgage for more predictable monthly costs
It’s a smart financial move for Rhode Island homeowners looking to restructure their mortgage while leveraging home equity at the same time.

How It Works

Here’s a quick example to understand how cash-out refinancing works in practice:

Your Home’s Value: $400,000
Current Loan Balance: $200,000
Maximum Loan (80% of value): $320,000
Cash Back to You: $120,000 (before closing costs)

With the new loan, your previous $200,000 mortgage is paid off, and you walk away with $120,000 in tax-free cash (minus any fees). Your mortgage balance resets to $320,000 under your new loan terms — and you use your equity to improve your finances.

How Cash-Out Refinance Works

Understanding the process and mechanics of a cash-out refinance.

Cash-Out Refinance Example

Current Situation:

Home Value: $400,000
Current Mortgage Balance: $200,000
Current Equity: $200,000
Current Interest Rate: 6.5%

After Cash-Out Refinance:

New Loan Amount: $320,000 (80% of home value)
Pay off Existing Mortgage: $200,000
Closing Costs: $8,000
Cash in Hand: $112,000
New Interest Rate: 5.75%

Benefits of Cash-Out Refinance

Discover how a cash-out refinance can help you achieve your financial goals.

Access to Substantial Funds

Cash-out refinancing gives homeowners access to significantly larger funds than personal loans or credit cards — ideal for major home projects, investments, or consolidating debt. Most lenders allow borrowing up to 80% of your home’s value, minus your existing mortgage balance.

Lower Interest Rates vs. Other Debt

Mortgage interest rates are typically much lower than rates on credit cards, personal loans, or HELOCs, making this a smarter, cost-effective solution for consolidating high-interest debt and saving on long-term interest.

Potential Tax Benefits

If the funds are used for home improvements, mortgage interest may be tax-deductible under current IRS guidelines. (Always consult a tax advisor for personalized advice.)

Simplified Monthly Payments

When used to consolidate debt, a cash-out refinance can replace multiple monthly payments with a single mortgage payment — helping you reduce stress and improve budgeting consistency.

Boost Your Home's Value

Using your equity for renovations or energy-efficient upgrades can increase your property’s value and comfort, potentially delivering a return on your investment.

Flexible Use of Funds

Unlike some loan programs, cash-out funds can be used for nearly any purpose — giving you full control to meet your personal or financial goals without restrictions.

Popular Uses for Cash-Out Refinance

Discover the most common and strategic ways homeowners use their cash-out funds.

Home Improvements

Invest in your living space and boost resale value with upgrades such as:

Popular projects:

Debt Consolidation

Pay off high-interest credit cards, student loans, or personal loans with a lower-rate mortgage and enjoy:

Potential benefits:

Investment Opportunities

Use your equity to fund you future investments:

Common investments:

Emergency Fund

Build or replenish your emergency savings to cover unexpected expenses like medical bills, major repairs, or periods of reduced income.

Major Life Expenses

Fund significant life events such as weddings, adoption costs, fertility treatments, or other important personal milestones.

Medical Expenses

Cover significant healthcare costs, elective procedures, or long-term care expenses that aren't fully covered by insurance.

Retirement Planning

Supplement retirement savings or create income-generating investments to help secure your financial future.

Cash-Out vs. Rate & Term Refinance

Understanding the key differences between the two main types of mortgage

Not sure which refinance option is right for you? Our mortgage specialists can help you evaluate your specific situation and recommend the best solution for your financial goals.

Are You Eligible?

Before you unlock your home’s equity, it’s important to understand the qualifications. While specific criteria vary by lender, most cash-out refinance programs follow these general eligibility guidelines in 2025:

Sufficient Home Equity

You’ll typically need to leave at least 20% equity in your home after refinancing. This means most lenders cap your new loan at 80% of your home’s current appraised value (known as the loan-to-value ratio or LTV).

Stable Income & Employment

You must show a reliable income source and steady employment history—generally at least two years in the same field. Lenders want assurance that you can handle the new monthly payment.

Mortgage Payment History

Lenders will want to see a clean 12-month history of on-time mortgage payments. Late or missed payments could disqualify you or result in less favorable terms.

Credit Score Requirements

A minimum credit score of 620 is usually required, but to secure better interest rates, a score of 700 or higher is recommended. Stronger credit equals better loan terms and lower costs.

Debt-to-Income Ratio (DTI)

Your total monthly debt—including the new mortgage—should be no more than 43% of your gross monthly income. A lower DTI (under 36%) can improve your approval chances and interest rate.

Homeownership Seasoning

Most lenders require that you’ve owned your home for at least 6 to 12 months before becoming eligible for a cash-out refinance.

Our Rhode Island mortgage experts will review your unique situation, answer your questions, and help determine if you’re eligible for a cash-out refinance that fits your financial goals.

The Refinance Process

Our streamlined process makes refinancing your mortgage simple and straightforward.

What to Expect

Timeline: Most rate and term refinances close within 30-45 days from application.
Documentation: You'll need to provide recent pay stubs, W-2s, tax returns, bank statements, and information about your assets and debts.
Costs: Closing costs typically range from 2% to 5% of the loan amount. You can often roll these costs into your new loan amount.

Why Choose Us?

You’ve built equity—now let it work for you. At RI Mortgage Brokers, our cash-out refinancing gives Rhode Island homeowners access to cash for renovations, debt consolidation, or investments—all while securing competitive rates and terms. Licensed locally, plugged into regional broker nuances, we move fast, cut through red tape, and deliver personalized support. Real equity, real results. No fluff.

License & Regulated

It isn’t side-hustle lending. We’re fully licensed Rhode Island brokers, bound by state and federal compliance. That protects you with transparent fees, regulated practices, and the peace of mind that your refinance is handled professionally.

Consistently Competitive Rates

We don’t settle for “one size fits all.” By shopping multiple brokers, we secure the lowest possible rates and best terms for your cash-out refinance—maximizing what you keep in your pocket every month.

Local market Expertise

We live here. So we know local broker quirks, market shifts, and underwriting patterns. That insight cuts hiccups, speeds approvals, and tailors your refinance to what actually works in this state.

Personal Expert Support

You’re not just a file in the system. Our team explains options in plain English, walks you through trade-offs—fixed vs adjustable, term changes, PMI removal—and helps you choose with confidence.

Stronger Chances of Approval

We know how to present your application so brokers say yes. By highlighting equity strength and positioning you with the right partners, we boost your approval odds compared to applying directly with rigid national banks.

Faster, Smoother Process

Cash-out refinances shouldn’t drag on forever. We streamline paperwork, keep brokers moving, and communicate clearly. That means fewer surprises, quicker closings, and you get your cash in hand when you actually need it.

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Local Buyers Served

99.99%

Client Satisfaction

4.9★

Average Review

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Personalized Support

What Our Clients Say

Real stories from homeowners who have used our rate and term refinance services.

Ready to Tap Into Your Home’s Equity?

Our mortgage specialists are here to help you access your equity with a cash-out refinance—giving you the funds you need for renovations, debt consolidation, or major expenses.

We’re available Monday-Friday from 9AM-5PM and Saturdays by appointment. Evening appointments are also available upon request.

Contact Us Directly

Connect with Top RI Mortgage Brokers

FAQs

Get answers to common questions about rate and term refinancing.

How much does it cost to refinance?

The total cost of refinancing your mortgage typically ranges from 2% to 6% of your new loan amount. Common fees include:

Loan origination fees
Appraisal costs
Title search and insurance
Credit report fees
Attorney or closing fees (in Rhode Island)

Some lenders offer no-closing-cost refinance options, where costs are rolled into the loan or offset by a slightly higher interest rate.

How much can I save by refinancing?

Your potential savings depend on several factors, including:

Your current interest rate
New interest rate and loan term
Loan balance and remaining term
Refinance costs

On average, refinancing to a lower rate can save tens of thousands of dollars over the life of your loan. Even a 0.5% rate drop could mean significant monthly and long-term savings. Use our refinance calculator or get a custom quote to see your estimated savings.

Is there a waiting period before I can refinance?

Yes, most lenders require a seasoning period before refinancing. General guidelines:

Conventional loans: Typically no waiting period, but lenders may prefer 6+ months of payment history.
FHA loans (FHA Streamline): Requires 6 months of on-time payments and at least 210 days since closing.
VA loans (IRRRL): Requires 6 consecutive on-time payments and 210 days from the original loan’s first payment.

Cash-out refinances often require you to own the home for at least 6–12 months.

Will refinancing affect my credit score?

Yes, but typically only slightly and temporarily. Here’s how:

A hard credit inquiry may reduce your score by a few points.
Your average account age might change if you open a new loan.
If refinancing lowers your monthly payment and improves your DTI, it can have a positive long-term effect.

Tip: Multiple credit checks for mortgage refinancing within a 45-day window count as one inquiry on your credit report.

Should I pay points to get a lower rate?

Paying discount points (prepaid interest at closing) can help reduce your interest rate. One point equals 1% of your loan amount and typically lowers your rate by 0.25%.

Consider paying points if:

You plan to stay in the home long enough to break even on the upfront cost.
You want a lower monthly payment.
You're locking in a long-term, fixed-rate loan.

Use a break-even calculator or consult our team to determine if paying points makes sense for your refinance goals.