1. What is Cash-Out Refinance?

A cash-out refinance replaces your existing mortgage with a new, larger loan, allowing you to receive the difference in cash. This calculator helps estimate your new monthly payment based on Zillow-specific rates.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

• \( P \) — New principal amount (dollars)
• \( r \) — Monthly interest rate (Zillow-specific)
• \( n \) — Loan term in months

Explanation: The formula accounts for both principal and interest payments over the loan term, with interest being front-loaded in the payment schedule.

3. Importance of Refinance Calculation

Details: Accurate payment calculation helps determine if cash-out refinancing makes financial sense for your situation, considering your new monthly obligations.

4. Using the Calculator

Tips: Enter the new loan amount in dollars, Zillow-specific monthly interest rate as a percentage (e.g., 3.5 for 3.5%), and loan term in months (e.g., 360 for 30 years).

5. Frequently Asked Questions (FAQ)

Q1: What makes Zillow rates special?
A: Zillow provides competitive, real-time mortgage rates based on current market conditions and your specific financial profile.

Q2: How does cash-out refinance differ from regular refinance?
A: Cash-out refinance lets you access home equity as cash, while rate-and-term refinance only changes loan terms without taking additional cash.

Q3: What costs aren't included in this calculation?
A: This calculates principal and interest only. Taxes, insurance, and closing costs would be additional.

Q4: How accurate is this calculator?
A: It provides a good estimate, but actual payments may vary based on final loan terms, fees, and exact rate lock timing.

Q5: When is cash-out refinancing a good idea?
A: When you need funds for home improvements, debt consolidation, or investments, and can secure a lower rate than current debts.