Do you have equity in your home? If so, refinancing could be an advantageous way for you to take cash and consolidate debt, enabling you to save money each month - lower your interest rates on higher interest accounts, pay only a single bill each month and even save on taxes. RHMC will help you Mortgage Smartly™.
Why Should I Choose Cash-Out Refinancing?
Cash-out refinancing lets you access your home equity, which is typically hard to convert into cash value. This is a good alternative to other loan options like a HELOC or a home equity loan, especially because it is a first mortgage and the interest rates are historically lower and more tax friendly.
Here are a few reasons that you may want to choose cash-out refinancing.
Pay for home improvements – Cash-out refinancing is often used to get access to the cash you need for expensive home improvements – like redoing a kitchen or bathroom. Usually, you’ll get a better interest rate on refinancing than you would get with a HELOC, personal loan, or another type of loan.
Consolidate debt – Cash-out refinancing can also be used to pay off consumer debt, like credit cards, personal loans, or even auto loans, in some cases. If you have a lot of equity in your home but also have debt, you can pay off your debts and save a lot of money on interest if you choose a cash-out refinance.
Get a lower interest rate – Just like a traditional refinance, you can get a lower interest rate when refinancing with cash-out refinancing. However, the interest rates for cash-out refinancing are still a bit higher than they would be with traditional refinancing, as cash-out refinancing is considered to be a bit riskier by lenders.
What is "Cash Out" Refinancing?
Cash-out refinancing replaces your existing mortgage with a new, higher mortgage. The difference between the two mortgage amounts is given to you as cash at the closing. In most cases, you can get a new mortgage up to 80% of your home’s value in a cash-out refinance – you can’t take out 100% of the equity in your property.
For example, if your home is worth $200,000, and you have a current mortgage of $100,000, you have $100,000 of equity in your home. You can access part of your $100,000 in equity by doing a cash-out refinancing loan for $150,000. You will pay off your current mortgage and get $50,000 in cash when you close on the new loan. You’ll simply now repay your new mortgage, and you can use the extra $50,000 for a variety of different purposes.
Ready to Mortgage Smartly™?
Cash-out refinancing has many outstanding benefits and might be the perfect solution for your current needs. Our team at RHMC, takes great pride in offering not just great rates but exceptional customer service. Let our team of loan specialists help you decide if cash-out refinancing is the best option for you.
Fill out a low rate quote request today and see how RHMC can make a cash-out refinancing option ideal for you.
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