1. What is Cash Refinance?

Cash-out refinance is when you replace your current mortgage with a new, larger loan and receive the difference in cash. This calculator helps you understand the amortization schedule for such refinanced mortgages.

2. How Does the Calculator Work?

The calculator uses standard amortization formulas:

Where:

• Outstanding Balance — Remaining principal at start of month
• R — Monthly interest rate (current rate / 12, as a decimal)
• EMI — Monthly installment (fixed payment)

3. Understanding Amortization

Details: Amortization is the process of spreading out a loan into fixed payments over time. Early payments are mostly interest, while later payments apply more to principal.

4. Using the Calculator

Tips: Enter loan amount in dollars, interest rate as a percentage (e.g., 3.5 for 3.5%), and loan term in years. The calculator will show monthly payment and full amortization schedule.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between cash-out and rate-and-term refinance?
A: Cash-out gives you money back, while rate-and-term only changes loan terms without cash disbursement.

Q2: How does refinancing affect my amortization?
A: Refinancing resets your amortization schedule, typically extending the loan term and changing monthly payments.

Q3: When does it make sense to do cash-out refinance?
A: When you need funds for home improvements, debt consolidation, or investments, and can secure a better rate.

Q4: What costs are involved in refinancing?
A: Closing costs typically range 2-5% of loan amount, including appraisal, title, and origination fees.

Q5: How does refinancing affect my taxes?
A: Interest may be deductible if funds are used for home improvements (consult a tax professional).