Cash-Out Refi: A Great Alternative to a Home Improvement Loan - Quicken Loans Zing Blog

Many new home buyers plan to stay in their first home between five and seven years, but usually wind up living there for more than 10. Sometimes, their starter house becomes their family home, which is exactly what’s happening in my case. We planned on staying in our house for just a few years, and now we’re coming up on 11. Like many other families in our position, we love the location of our house, and our neighborhood is terrific, but we’ve long outgrown the tiny little house that was once perfect for our brand-new family.

Instead of going through the stress of buying a new house in a location that isn’t as great as where we are now, we can renovate! If you’re in the same situation, your first priority when embarking on a major home renovation should be to create a realistic budget. There are many sites online, such as HomeAdvisor, that can give you the average costs of home renovation projects. You should also consider talking to at least two or three general contractors to get estimates.


Many people go over budget despite their best efforts. Plan to spend at least 30% more than your estimated budget so you have a cushion for unexpected costs. Having a contingency plan early on will put you in a much better position once construction begins.

This all sounds great, but how are you going to get the cash to set up a budget? A home improvement loan may seem like the most likely choice, but it may not always be the right one for you.

A great way to get cash for your new home improvement without having to take out a new loan is a cash-out refinance. This type of refi can help you convert the equity in your home into cash that you can use to renovate or remodel.

Unlike a home improvement loan, a cash-out refi isn’t a second mortgage. It’s your primary mortgage. That’s a nice benefit because you only have one payment to worry about instead of two. A cash-out refinance works much like a regular refinance, but instead you refi for an amount that exceeds your current principal balance, and you keep the remainder in cash.

For example, if you bought your home for $200,000 10 years ago and have paid off $75,000 of the loan, you’d still owe $125,000. Now home prices are on the rise, and your home is now worth double. If you got a cash-out refinance for $250,000, you’d pay off the outstanding $125,000 balance and then take the remaining $125,000 for a remodel or renovations.

You shouldn’t have to move to find the house of your dreams. The house you want could be right under your feet, and it doesn’t have to be an expensive journey to get it there. Whether your project is large or small, a cash-out refi can help you get started.

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This Post Has 14 Comments

  1. Hello,

    My wife and I bought our home 2 and a half years ago. We used QL. I am interested in learning more about the Cash Out loan. However I am a bit confused on the difference between QL and Rocket? When you contact me and we talk, maybe you can explain the differences.


    Michael Hoene Jr.

    1. Hi Michael:

      I like to explain Rocket Mortgage to people this way: It’s a self-service mortgage, but you have the option to get help at any time if you have questions or concerns. You provide us with income and asset information which can be sourced from a number of our available trusted partners. After that, you pull your own credit and we can give you refinance options to meet your goals in a matter of minutes if you choose. Of course, everyone works at their own pace. The goal of Rocket Mortgage is to remove the pain from the process by sourcing the necessary documentation electronically upfront. That way, you don’t have to go hunting around in six different places for the paperwork. If at any time you get stuck, you can get in contact with one of our Home Loan Experts by phone or online chat.

      If you’d like to get started with Rocket Mortgage, go ahead and get started. Otherwise, one of our Home Loan Experts will be happy to help you if you call (888) 728-4702.

      Kevin Graham

  2. I would like to learn more about the cash out refinance. I’ve been a quicken customer for about 10 years, but i also experience identify theft, so it is a challenge to do anything. Is this more like a streamline loan?

    1. Hi Calvin:

      I’m sorry to hear about your identity theft. It could theoretically impact your mortgage depending on how the situation impacted your finances and credit. However, the theft itself wouldn’t affect the type of loan you could get. A streamline is not a cash-out. Cash out is a different process. We can definitely help you look into your options if you want to go ahead and fill out this form or call (888) 728-4702.

      Kevin Graham

  3. I already have my mortgage through Quicken Loans and absolutely love it. I was wondering what other loans may be available for home improvement projects.

    1. Hi Roy:

      I’m glad to hear you’ve had a pleasant experience with us! We can definitely help you look into your options for a cash-out loan. If you want to get started online, you can check out Rocket Mortgage. Otherwise, feel free to give us a call at 800-251-9080.

      Kevin Graham

  4. I have two homes on two acers they are paid for, one we let my daughter live in and the other we live in. I only need a small amount of cash or line of credit. I have $140k invested but am short on funds my wife and I would like to get 15k and pay it off in 5 years or less.
    I am on disablity but but only have the norn. household expences my crdit score is poor dew to med. bills. So do you think you can help me?

    1. Hi Johnnie:

      We don’t do loans in that small of an amount. However, I’m going to have someone reach out to go over all your options. You may be able to get a personal loan. If nothing else, we may be able to give you some advice.

      Kevin Graham

  5. I would like to speak with someone about a home loan for home improvement, l have a home mortgage already with quickenload
    Thanks M Shelton

    1. Hi Marsha:

      We can definitely help you look in your options and see what works best for you. I’m going to have someone reach out. They’ll be in contact.

      Kevin Graham

  6. The way you real- estate people throw out such pie in the sky numbers just frustrates and angers me. Home prices doubled in the last ten years? Who are you kidding? Where is this fictional place, I want to move there.

    1. Hi William:

      The intention is not to anger you. Although all housing markets are very local in nature in terms of pricing, the national trend is that prices are going up. Monthly data from multiple sources has bared that out from at least 2012. The intention is to educate people on home values so they take notice of their market and conditions in their area. For more information on the home values, you can check out this post with a home value index. Hopefully prices come back in your area soon.

      Kevin Graham

  7. I have an older house. I want to rip the interior to the studs and redo everything. I wonder what something like that costs. LOL
    My wife tells me we’ll just buy another house. Probably a better idea.

    1. Hi David:

      It does sound like it might be cheaper to buy, but if you’re ready we can help in either case. I’m going to have someone reach out to you to gauge your interest.

      Kevin Graham

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