Here at the Ultimate Lending Team, we’re ready to help take your property investment to the next level by helping you manage the equity that already exists in your home. Home improvement projects, vacation homes and lower interest rates don’t have to be a pipe dream. Through a process called “cash out refinance” you can access cash from one of your largest savings accounts, your home, and put it towards just about anything you want.
What It Is
A cash out refinance is when you take out a new home loan for more money than what you currently owe on your mortgage and receive the difference in cash. Lending guidelines for a cash out refinance require that you leave 20% equity in your home. Therefore if you have more than this amount of equity, you can access that cash. For example, if your home is valued at $500,000 and you owe $300,000 on your current mortgage, you could take up to $100,000 cash out! Your new loan amount would be $400,000 which is still 80% of your value and meets the guidelines.
Why Cash Out Refinance
You may choose to go this route for many reasons including, but not limited to:
- Home renovations, like a new kitchen or bathroom.
- Landscaping projects.
- Just to have some cash on hand
- Purchase or upgrade to a new home
- Purchase an investment property or second home
- Consolidate high interest consumer debt (credit card debt, student loans, auto loans, etc):
- Roll your debt balance into the first mortgage balance and have them all consolidated into one low fixed interest rate.
- You can choose to skip up to 2 mortgage payments
When to Cash Out Refinance
It makes sense to cash out refinance when:
- Your home value increases.
- You need cash at a low interest rate.
- You have more than 20% equity in your home.
When you work with the Ultimate Lending Team, we evaluate your home value monthly to determine the best equity strategy to help you achieve your property and investment goals. To learn more about the process of cash out refinance and what it could look like for you, watch our YouTube video!
Despite what you may have heard, refinancing your home is easier than you think. Call or click today to see if this option is right for you!