When you struggle with your finances, it affects your ability to plan ahead. You may aspire to complete a major home renovation or buy another property. But without the available funds, these goals probably feel out of reach. However, if you are a homeowner that meets the right criteria, you can cash out on a refinance to get the money you need to build a brighter future for yourself. The mortgage lenders in Georgia at BrightPath will provide you with comprehensive analysis and answers to help you achieve your dreams.
Mortgage Lenders in Georgia: What is a Cash Out Refinance?
According to mortgage lenders in Georgia, when you cash out on a refinance you can renegotiate your loan term for a new amount based on your current property value that is higher than the balance on your existing mortgage. When you do this, you get the difference between these two amounts in cash. To be eligible, you must have 20% equity in the property and make timely payments on your mortgage.
The Best Ways to Use the Funds from Your Cash Out Refinance
While the money you receive from a cash out refinance can be utilized in many ways, mortgage lenders in Georgia recommend using it to pay off existing debts and make investments that build your financial portfolio.
- Home improvement. This is the most common use for these funds and is usually considered to be a safe investment because it increases the value of your property. By enhancing your home with larger renovation projects like adding a room or remodeling a kitchen, you are guaranteed to make a better profit when you sell.
- Pay off debt. A cash out refinance is a great way to pay off your debt because it can afford you a much lower interest rate than other types of loans. Mortgage lenders in Georgia recommend using it for higher-interest debts like credit cards.
- Emergency capital. For those that are self employed or own their own business, cashing out on a refinance can help you to build your reserves for potential emergencies down the line. Make sure to do this while you are in good standing with your credit score and savings, as waiting until the situation is dire may prevent you from being approved.
- Purchase a rental property. Buying a rental property is a fantastic way to increase your wealth. Once you make money on this investment, you can cash out on a refinance on your rental home to purchase another one. This allows you to build a large investment portfolio that generates a reliable and secure income.
- Investment protection. If you currently have investments that you do not wish to sell, using your cash out refinance can help to protect you against penalties and downturns in the housing market.
Cash Out on A Refinance to Pave the Path to a Better Tomorrow
Leveraging your current home equity to make smart investments in your future is one of the best decisions you will make for yourself. The specialists at BrightPath will provide you with invaluable insights and guidance to find the right refinance option for you. Contact us today to schedule a consultation.
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