Have a big expense to pay for? Looking to consolidate debt? If you need some cash and have equity in your home, a cash-out mortgage refinancing loan can be a great option.
What Does Cash-Out Mortgage Refinancing Mean?
Typically, when you refinance your home, it’s to get a better interest rate, get better loan terms, or lower your monthly mortgage payment. With cash-out mortgage refinancing, you get a portion of your home equity paid to you in a lump sum. Your old mortgage is paid off, and you have a new mortgage that includes the balance you owe on your home loan, plus the amount that’s being taken out in cash from your equity.
How It Works
Let’s say you bought a home at $520,000, and you currently owe $350,000.
Now let’s say you would like to take out $50,000 for home improvements. In a cash-out refinance, your new loan amount will be the existing $350,000 on your original loan plus the $50,000 cash-out plus closing costs.
After closing, your lender would issue you the lump sum amount and you would be free to use the money towards your home improvement project!
What Are the Benefits Of Cash-Out Mortgage Refinancing?
The #1 benefit is that you have the freedom to use the extra funds for an array of options. You could pay off debts, pay for a wedding or college education, make some home improvements, or build that pool you’ve always wanted.
Secondly, the rates for a cash-out mortgage refinance are typically lower than if you used another method of getting a personal loan, such as a credit card.
Using the equity in your home is a great way to get extra cash to fund some of the larger expenses in your life or to help consolidate your debt at a lower interest rate. Plus, with today’s low interest rates, your monthly mortgage payment might just go down.
At Reliant Home Funding, we know all the details of cash-out mortgage refinancing loans and are ready to help you get one. Contact us today to get your application started!
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