Who it is for
- You have equity and a clear use for the cash.
- You have compared this with a home equity loan or HELOC, which do not always replace the first mortgage.
- The new payment still fits if other debts are not actually paid off.
How it usually works
- We estimate value, the current payoff, and the cash you want.
- Lenders cap how much of the value you can borrow. The cap depends on the loan and the occupancy.
- Closing costs come out of the numbers. Ask to see them before you fall in love with the cash amount.
Read this before you get attached
- Turning credit-card debt into a mortgage puts the house at risk if you do not pay.
- A lower rate on a much larger balance can still raise your payment.
- If you run the cards back up, you are worse off than when you started.
Questions worth asking
- How much cash is left after closing costs and paying off the old loan?
- What loan-to-value is this lender allowing?
- What happens to my payment if I do not pay off the other debts?