Q. Can you tell me what constitutes a cash-out transaction?
A. No problem, there are several instances. One would be where the borrower receives more than $2,000 cash in hand. Another
instance would be a refinance involving debt consolidation that is not
secured by property, e.g., credit cards, car payments, student loans,
etc. (Note: some lenders would not consider this a cash-out
transaction, but most would). A third example would have to do
with what are known as “seasoning requirements”. This has to do
with a refinance combining a 1st mortgage with a fully amortized 2nd
mortgage (or equity line) where the 2nd (or equity line) is less
than 12 months old or in the case of an equity line that has had
a cash withdrawal in excess of $2,000 within the last 12 months.
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