Cash-out and/or Debt Consolidation Refinance
A “cash-out refinance” means you can take cash from some of the equity in your home when you refinance. This is a great way to borrow money, because the interest rate on mortgage loans are usually much lower than any other line of credit.
There are also tax benefits because mortgage interest is tax-deductible; this is one of the reasons why so many borrowers refinance their homes to pay off all their credit card debt (which is not tax deductible).
The most common reasons to cash out is to pay off debts, which can increase your cash flow because you’re lowering the monthly payments by extending the payments over a longer term.
Many mortgage lenders will offer a refinance package where you refinance for more than the balance remaining on your old home loan. In the mortgage world this is called ?cashing out?. The economy has also caused interest rates to drop recently which may allow you to refinance your home without increasing your monthly payments. The extra cash that results from refinancing can be used for many purposes; one of the smartest ways to use these funds is to pay off any loans with higher interest rates. If you are in a positive position regarding debt you may be interested in using the money for a more enjoyable purpose, such as building an addition on to your home. How ever you decide to spend the money, your mortgage broker can help you through the process.
You can take cash out on a refinance to:
- Pay off other high-cost loans (the interest on which may not be tax deductible)
- Pay for the cost of education
- Make home improvements
- Make investments
- Finance retirement
We’ll help you choose a mortgage loan that’s right for you. We’ll guide you through the process and expedite the paperwork so you’ll have your cash in hand before you know it. Give us a call at 310-348-7878 and let’s get started.