When to Cash-Out Refinance Your Home
When it comes to lowering your mortgage, there are two popular solutions to choose from: refinancing and cash-out refinancing.
Your home is an investment, so you should get to know the difference between these two types of loans in order to maximize your savings.
When to Refinance:
Think of refinancing as replacing your existing mortgage with a new one. There are many reasons to consider refinancing:
- Saving Money
- Converting your adjustable-rate mortgage to a fixed-rate mortgage
- Locking in lower interest rates
- Lowering your monthly payments
Additionally, if your credit score has gone up you may be able to qualify for a lower rate.
Click Here to Learn About Government Assisted Refinancing
What is a Cash-Out Refinance:
A cash-out refinance is when you refinance an existing mortgage. The new mortgage is for a larger amount than the original mortgage, allowing the borrower (you) to take the difference between the two in cash.
When to Cash-Out:
Many homeowners use a cash-out refinance so they can turn the equity in their home into cash.
The most common reason for getting a cash-out refinance is for large expenses such as home improvements. This is also a good way to add to your home’s value.
If you’re looking for ways to tuck away more money, it may be beneficial to try cash-out refinancing. Some cash-out refinance benefits may allow you to:
- Have some cash for large expenses
- End up with a more stable interest rate
- Lower your monthly payments
Under the right circumstances, a cash-out refinance can offer you some much-needed money.
Finally, make sure you shop around and get estimates from multiple mortgage lenders to ensure you’re getting the best rates for your budget.