What is a cash out refinance? Bottom line…. It is refinancing your mortgage for more than you currently owe and pocketing the difference. Your home can be a piggy bank, transforming your equity in to cash to use in multiple ways.
Need money for a wedding, always wanted that dream kitchen. Well now you can have it. This is a great resource to pull cash out of your home. With low rates and great mortgage programs available this has become popular again!! The mortgage industry had a dark cloud over it with declining home values and the tightening of mortgage guidelines but the sun is shining brighter with increased values of homes and continued great rates.
How do you decide when the right time for a cash out refinance is? Spend wisely, even before you do the math, its best to take a close look at how you spend the money from a cash out refinance. Specifically, is the cash for short or long term purposes? How long are you planning on staying in the home? Doing a cash out refinance will net you less money when you sell your home.
Are you putting money back in to your home which will increase the value? Are you using for the money for a vacation of a lifetime or purchasing that red corvette that you’ve dreamed about since you were a kid? Do you want to spend up to 30 years paying for this? These are questions you will need to ask yourself “What’s best for you.” Don’t break the piggy bank, you’re living in.