Would someone really refinance their home and not take money out of it? Certainly, if they could get a lower rate, build equity faster and pay off the home sooner.
For people with extra cash available, this can be very attractive compared to the low savings rates being paid by banks.
In the example below, the current mortgage is 5% for 30 years after 48 payments of $1,342.05. The owner can refinance for 15 years at 3.37%. If they put $36,000 into the refinance, their payments will be slightly more but the mortgage will be paid off in 15 years. At that same point, if they keep the current mortgage, their unpaid balance will be $136,049.03.
With our current home values rising minimum 6% per year right now and our savings accounts at zero percent per year this is a great way to invest your cash.
If you have a goal to get your home paid off and have the available funds, a Cash-In Refinance may be just the strategy for you.
You can play with some of your numbers here! Just take your loan balance and put in the down payment that you are thinking and see what it makes your payment.
And if you have questions do not hesitate to contact me. I have several great lenders that I can recommend that can help you out in your analysis.