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Question by : Refinancing VS. Equity Take out – isnt the last just a result of the first sometimes?
PS. some bank forms ask you to check off whether you are applying for ‘Refinancing’ OR ‘Equity take-out’. that is the source of my confusion since when you have equity and you refinance you can usually take equity out. THANKS.
Best answer:
Answer by Bob
In this case refinancing refers to taking a new loan for your current first mortgage balance which may include your closing costs. The HARP (Home Affordable Refinance Program) loans will even allow a straight refinance for up to 125% of appraised value in some cases. The equity take out refers to borrowing additional funds or including paying off a second mortgage that was not used to purchase your home. The equity take out will probably have a slightly higher rate and will limit your loan amount to 85% of appraised value.
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