Cash-out refinancing can sound like an intimidating concept, when in reality, it can be explained simply. Let’s say you bought at home for $200,000 a few years back. Now, after your successful monthly mortgage payments, you only owe $80,000 on your loan. This means you have $120,000 in equity. Doing a cash-out refinance means you will take a certain amount of the $120,000 you have in equity and liquidate it. People do this for a number of reasons like home improvements, family matters, or something as simple as buying a new jet ski! And with us, you can use “The Bagel Loan” where there are no closing costs, so we always make it worth it. Your home can be used for so many different aspects of your life. It is an incredibly important investment that needs to be fully understood to utilize. We will help you to understand all of the options you have with your home and take you step by step through the entire process. Give us a call to hear about your options, and what is available to you.
Now a Cash-out Refinance can sound a lot like a home equity line of credit (HELOC) so here are some differences:
- A home equity loan is a separate loan on top of your first mortgage.
- A cash-out refinance is a replacement of your first mortgage.
- The interest rates on a cash-out refinancing are, lower than the interest rate on a home equity loan, and home equity loans have adjustable rates, meaning they will change depending on the market.