Ask any mortgage broker in Atlanta and they’ll tell you mortgage rates fluctuate a lot year after year, and the general cost of housing has risen over the past several years. When home prices are on the rise, this gives homeowners a unique opportunity to make the most of rising home equity with a cash-out refinance.
A cash-out refinance takes advantage of the equity you’ve built up. You can get a loan for more than what you currently owe for your mortgage and take the difference in cash. From there you can plan to refinance your home to pay off debt or take the cash you now have and use it for an investment such as expensive home renovations.
For example, for the past few years, you’ve been making payments on your mortgage and (as is likely via the trend) the market value of your home has increased. Let’s say that your remaining balance on your mortgage is $100,000. With a cash-out refinance, you could refinance and get a new mortgage for $125,000. This does two things for you: you get to take the difference of $25,000 home as a lump sum, and you’ll be getting a new mortgage rate. That new rate lowers your monthly mortgage payments as well. It’s a win-win situation.
You always want to consult your mortgage broker in Atlanta as there can be limits on how much equity you can cash out depending on the kind of loan you refinance to. Most loans will range from 70-100% of your home’s total value, so if the market value of your home has been rising, you could get a great deal.
Why Should I Consider a Cash-Out Refinance?
Any mortgage broker in Atlanta will tell you there’s no limit to the number of reasons why a cash-out refinance can be great for you and your family. Each homeowner’s situation is unique, as are the individual reasons for doing so.
- Refinancing mortgage to consolidate debt
- Lower your monthly mortgage payments
- Use the money for investments
- Make some home improvements
- Finance a business
- Help pay for college or medical expenses not covered by insurance
Many homeowners seek to do a cash-out refinance so that they can refinance their mortgage to consolidate debt into a lump sum payment. It can be a very convenient method but do it with some caution. If you pay off credit card debt with the money, you could run the limits up again and find yourself in more debt, which can impact your credit score down the road.
A cash-out refinance can be done whenever is best for you and your family. You should consult with your mortgage broker in Atlanta to find out what kind of loan you should get. Make sure you also speak with your tax advisor so that you understand any tax implications a cash-out refinance might have.
Contact BrightPath, Your Mortgage Broker in Atlanta
If you have questions about mortgages and lending options for you and your family, contact BrightPath by filling out our online form or calling us any time at 888-222-6003. We’ll be happy to help you decide what’s right for you and your family.