Hi,
Several years ago I purchased a property ($312,000) with 20% down ($62,400). After years of paying the mortgage (30-year fixed), the principal portion each month has increased my equity by $16,000. So my current equity of the property is $62,400 + $16,000 = $78,400.
This year, the property has appreciated in value and it is now worth $450,000. I am planning to do a cash-out refinance. Looks like I will be able to get $105,100 cash from it. Here is the calculation:
$450,000 (current value) x 75% (LTV) - $230,000 (outstanding mortgage) - $2,400 (closing cost) = $105,100 (cash I will get)
Since I will have a new and bigger 30-year mortgage, what will be my equity after the cash-out refinance?
Thanks.
Read more: What is my equity after cash-out refinancing?
