Many homeowners are taking advantage of cash-out refinance options, which allow them to use the built-up equity in their home for cash to spend on things that matter most to them.
A cash-out refinance allows the homeowner to pull out equity from their property in the form of cash. With a cash-out refinance, the homeowner can lower their interest rate or change the loan term length if current interest rates allow.
There are several reasons cash-out refinance is a good option for homeowners, despite rising interest rates.
- Get cash back. As your home appreciates in value you have a higher equity position. Mortgages typically have the lowest interest rates, so borrowing against your house can be the best way to get cash, even if that means your mortgage rate is higher. You can use the cash how you want to use it - home upgrades, vacations or even pay off debt.
- Buying a new home. You may not have a 20 percent down payment to buy a new house, but you have a lot of equity in the house you’re already in. If you intend to sell your current house but you want to buy a new one first, you can liquidate cash on a refinance. You can buy a new house with that money and then sell the previous house.
- Eliminate Private Mortgage Insurance (PMI). If your house has gained value and you have 20 percent equity in your house, you can remove PMI from your monthly payments. Typically, the cost to refinance and even a higher interest rate is still lower than paying PMI monthly.
Take advantage of a cash-out refinance option to use the equity you’ve built up in your home and spend it on things that matter most to you.
To learn more or receive a report on the value of a cash-out refinance tailored to you, talk to a GO Mortgage Home Loan Advisor.