Conventional Cash-Out Refinance in Colorado: The Rules

Conventional cash-out: turn equity into cash

A cash-out refinance replaces your mortgage with a larger one and pays you the difference. It is one loan and one payment, and the whole balance moves to the new rate.

Who it fits

Owners with equity who want one loan and one payment: for repairs and improvements, to pay off higher-rate debt, or to buy out a co-owner. It suits owners whose current rate is close to, or above, today’s rate, because the whole balance moves to the new rate.

Many homes here sit on acreage, and the appraisal sets how much equity you can use. We look at recent sales with you before an appraisal is ordered, so the cash you plan on matches what the value is likely to support.

Cash-out or a second loan

If your first mortgage has a low rate, a HELOC or home equity loan on top of it leaves that rate in place, and only the new money carries the new rate. The fair way to compare is the blended rate: the average rate on everything you would owe, weighted by balance.

Enter your current loan and the cash you need to compare a second loan with a cash-out refinance on a blended rate. Rates are your inputs, not offers.

HELOC or cash-out refinance?. Turn on JavaScript to change the numbers.

Less interest over 5 yearsOption 1

$31,711 less: $60,105 with a second mortgage against $91,816 with a cash-out refinance.

Option 1: keep your loan and add a second mortgage$1,622a month; blended rate 4.57%

Option 2: cash-out refinance$1,816a month at 6.75% on $280,000

When your current rate is well below today's, adding a second mortgage on the new money usually costs less than refinancing the whole balance. The blended rate shows it in one number.

The second mortgage is calculated as a 20-year loan for comparison. Many HELOCs start interest-only with a variable rate, so payments can change. Closing costs are not included. Rates are your inputs, not offers.

Open it full size

Other cash-out loans

VA cash-out: up to 100% of value under VA rules, with no monthly mortgage insurance, and it can replace a non-VA loan.
FHA cash-out: up to 80% of value with more flexible credit, plus FHA mortgage insurance.

Calculators and guides

Common questions

How much cash can I take out?

For a one-unit home you live in, the new loan can be up to 80% of the appraised value. The cash is that amount less your current balance and the closing costs.

Cash-out or a HELOC?

If your current rate is well below today’s, a second loan on only the new money can cost less in interest than refinancing the whole balance. The blended rate shows it in one number. A cash-out gives you one loan and one payment.

Can I use a cash-out to pay off other debt?

Yes. It can lower the rate on that debt, but it turns it into debt tied to your home, often over a longer time. Compare the total interest, not only the payment.

Is the interest tax deductible?

It depends on how you use the money. IRS rules limit the deduction to money used to buy, build or substantially improve the home. Ask a tax professional before you count on it.