So How Does it Work
Suppose you purchased a house some time ago and have been making your mortgages payments on time. During this time, the value of your home has risen and you now owe $80K on a house that has a price of $250K.
While looking at recent rates, you discover that you can get a lower rate through refinancing your mortgage. In such a situation, a homeowner can refinance for more than what they owe which, in this case, is the $80K.
Suppose you, as the owner, wanted $50K in cash to remodel your house. You could opt to refinance for $130K, which leaves you with $50K in cash!
There are certain conditions that are applicable before you are approved for a cash-out option. Firstly you will have to prove that you can afford it. You will also have to provide the usual documents for assets, debts, and income.
Common Reasons Why People Opt for It
One of the most common reasons why people opt for a cash-out refinance is to get funding for home upgrades and improvement. Another common reason is getting the money for making college fee payment. People also opt for cash-out refinance when they want to buy a second property. The money received from utilizing this option can be used as a down payment for a second property.
Home Upgrades That Add Value
A visually appealing house can fetch a price that is higher than the market value of a shabby looking property. An investment in paint pays off at the time of sale…Costs do vary when making this investment on your house but typically an exterior paintjob costs around $3000 to $5000.
Upgrading the Kitchen
Upgrading your kitchen not only improves the chances of a sell-through but it also improves cooking and meal time with the family. Appliances such as dishwashers can be a great addition to your home as it helps conserve water and save time that would have gone in washing.
Markets have the greatest rates in recent times and the time is optimal not just for potential homebuyers but also people looking to get money through a cash-out option.
Cash-out refinance is an excellent tool for gaining access to tied-up capital and using it in a more meaningful way. Debt consolidation, college fee, investing in a second property or even upgrading your home are just a few examples of how this option can be used.
If you are wondering how you can avail the amazing rates of today’s market, check out e-Finance Mortgage for a quick quote today.