Cash-out refinance in New Hampshire

What is a cash-out refinance?

A cash-out refinance replaces your current mortgage with a new, larger loan and pays you the difference in cash at closing. Fannie Mae's Selling Guide lets the equity taken out be used for any purpose, such as home improvements, paying off higher-interest debt or funding another purchase.

Because the new loan replaces the old one, the new rate and term apply to the whole balance, not just the cash you take out. A HELOC adds a second loan instead and leaves your first mortgage in place.

How long do I need to own my home?

For a conventional cash-out refinance under Fannie Mae's rules, at least one borrower must have been on title for at least six months, and an existing first mortgage being paid off must be at least 12 months old, measured from its note date to the new loan's note date. Exceptions exist, for example for inherited property. A home listed for sale must come off the market by the time the new loan funds.

Can veterans take cash out with a VA loan?

Yes. A VA cash-out refinance can replace a VA loan or a non-VA loan with a VA-backed loan. You need a Certificate of Eligibility, must meet the VA's and the lender's credit and income standards, and must live in the home you're refinancing. See the VA loan guide.

What about FHA loans?

FHA has its own cash-out refinance for a home you live in, with its own rules, and Tom can compare it with conventional and VA options. If you already have an FHA loan and only want a lower payment, an FHA streamline refinance may be simpler, but a streamline doesn't take cash out.

Do I pay NH transfer tax on a refinance?

Usually not. New Hampshire's real estate transfer tax applies to sales and transfers of real estate, and RSA 78-B:2 exempts a mortgage given to secure a debt and the discharge of a mortgage. A refinance that doesn't change who owns the home is a new mortgage and the discharge of the old one. If you add or remove an owner on the deed at the same time, ask your closing attorney how the tax applies.

A cash-out refinance still has closing costs, such as lender fees, the appraisal, title insuranceTitle insurance Insurance that protects you and the lender against problems with the property's ownership history. See the full glossary× and recording fees. The break-even calculator shows how long a refinance takes to pay for itself.

Is a cash-out refinance or a HELOC better?

A cash-out refinance can make sense when you want one payment, or when today's terms beat your current loan's. A HELOC can make sense when you want to keep your current first mortgage or draw money over time. Tom can show both side by side, with the payment and closing costs for each.

Can I cash out on a rental property?

Cash-out refinances are also available on investment properties, through conventional loans and DSCR loans, each with its own rules. Investors often put the cash toward the next purchase. See investor loan options.