How To Start a Cash-Out Refinance?

Once you understand what a cash-out refinance is, its pros and cons, the next step is to decide whether you are interested or not. For those who may like to benefit from an Arizona mortgage refinance, starting this process is relatively easy. More so, if you have prepared yourself adequately. The procedure of starting a cash-out refinance is the same as the one you went through with your current mortgage.  

Step 1 – Choose a Lender and Fill Out an Application Form 

To initiate a cash-out refinance. You must settle on a particular lender. You obviously shopped around for mortgage rates during the preparation stages and identified a suitable lender. These days the application for mortgages is pretty quick and easy.   

Step 2 – Provide Financial Documents 

Before granting your request, a lender needs to look at your financial records. Therefore, they may ask you to provide financial documents such as W-2 forms and pay stubs. In most cases, these are the main documents that will be needed. One of the key requirements for a cash-out refi is proof of employment, and that’s why homeowners have to provide paystubs. Since not all lenders are the same, they may ask for additional documents. It’s crucial to have all your paperwork ready.   

Step 3 – Get a Home Appraisal 

To determine how much equity you currently have, you will need appraisal services. Please note that the homeowner should pay for home appraisal fees. They will be included in the closing costs. Appraisal fees range from $250 to $500 depending on the location and size of the home. Getting a home appraisal is a critical step that benefits you and the lender. For homes that have been recently appraised, the lender may choose to skip this step. After obtaining your current home value from the appraiser, you can use our refinance mortgage calculator Arizona to determine how much you will cash out.   

Step 4 – Wait through the Underwriting Period 

Various lenders have different underwriting timelines. During this stage, the ball is no longer in your court. Your lender will go through your financial documents and determine whether you are an ideal candidate for a cash-out refi. It’s crucial that you be responsive to information requests. At times, a lender may require additional details. Once the verification is done, the lender will reach out and inform you about their decision to refinance your mortgage and pay the equity in cash.   

Step 5 – Close on the Loan 

After the appraisal, most of the things are handled by the lender. You just have to make yourself available during the closing stage and sign in on the loan. When closing the loan, bring all documents that the lender will request. It’s important to know that there are closing costs which you will have to pay. There is the option to pay right away or roll the costs to the loan. The latter option often comes with interest. If you can afford it, it would be best to pay the closing costs on the spot.   

Step 6 – Receive Your Cash 

With a cash-out refi, you don’t often receive the funds on the same day. The check is disbursed later on. After the funds arrive, you can use them to fund a home improvement or renovation, pay for your kid’s tuition or spend the funds how you see fit.    Conclusion  That’s how you can start a cash-out refinance and see it to the end. It’s not a complicated process, but it’s crucial that you know how to go about it. This will help you avoid unforeseen surprises when applying for an Arizona mortgage refinance.

A Lending Hand for Financing Home Mortgages

Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.



V.I.P. Mortgage, Inc. DBA Spire Financial does Business in Accordance with Federal Fair Lending Laws. NMLS ID 145502. For state specific licensing, visit V.I.P. Mortgage, Inc. is not acting on behalf of or at the direction of the FHA/HUD or the Federal Government. This product or service has not been approved or endorsed by any governmental agency, and this offer is not being made by any agency of the government. V.I.P. Mortgage, Inc. is approved to participate in FHA programs but the products and services performed by V.I.P. Mortgage, Inc. are not coming directly from HUD or FHA. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions may apply. This is not an offer to enter into an agreement. Not all customers will qualify.

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