Cash Out Refinancing with Home Equity Loans
BD Nationwide Announces New Cash Mortgage Loan Options for Monthly Payment Reduction and More Tax Deductible Equity Loans
Cash Out Refinancing with Home Equity Loans!
What is Cash Out and is it right for you?
Are you thinking about tapping into your home equity for long awaited home improvements or another type of long-term purchase? If so, then a cash-out refinance may be the right option for you. In some cases, homeowner are very happy with the interest rate on their 1st mortgage, so they prefer using a home equity loan to get quick access to cash.
Cash-out refinancing means replacing your existing loan with a new mortgage. Unlike a home equity loan or line of credit, you are not taking out an additional loan on top of your first mortgage. By borrowing more than you owe on your home, you are able to use the additional cash for whatever you like. For instance, you could use the money for the above-mentioned home improvements or maybe to buy a second home or pay off credit card debt.
Refinance Loans with Cash Back
According to Dan Taylor, a financial expert on Bankrate.com, those with clean credit histories who have quite a bit of equity in their homes may reap the most benefits from a cash-out refinance. He also points out that interest rates are typically lower for cash-out refinances than home equity loans or lines of credit.
Before you decide that a cash-out refinance is right for you, there are several things to consider. You will definitely want a lower interest rate than the one you currently have. Because a cash-out refinance does involve closing costs and other fees, you will need to assess whether your monthly payments will decrease enough to offset these upfront costs.
You also must think about how you are planning to spend the money you receive from the refinance. Purchases with long-term benefits tend to make the most sense, as you will be starting over with brand-new mortgage - most likely a 15 to 30-year commitment.
Smart consumers will do their due diligence to determine how much they'll save by refinancing. For example, evaluate how you plan to spend the money. Consider how long you plan to be in the house and whether that timeframe is long enough to break even. And finally, make sure to compare the cash-out refinancing option to taking out a home equity loan or line of credit. - Article was written by Jennifer Frakes exclusively for BD Nationwide Mortgage.