I want to utilize the equity in my home to buy an investment property, second home, consolidate debt, fund a home project, or cover unexpected expenses.
Use a cash-out refinance to access the equity you’ve built up in your home; the amount of money you receive is lump sum and based off the value of the equity you’ve built up in your home. It can go towards any purpose, including home renovations, debt consolidation, or other financial needs, and is available as a fixed- or an adjustable-rate mortgage.
How does a Cash-Out Refinance work?
The cash-out process is similar to a regular refinance, commonly referred to as a “rate-and-term” refinance. It involves replacing your current loan with a new loan that typically comes with a lower rate or a shorter loan term, or both; however, with a cash-out refinance, you can also take out a lump sum of your home's equity, which is the difference between the value of your home and the remaining balance on your mortgage.
What are the biggest benefits of a Cash-Out Refinance?
- Access to cash: By refinancing for more than you owe, you can receive the difference in cash. Use funds for a variety of possibilities, including purchasing another property, home improvements, debt consolidation, or education costs
- Lower interest rates and simplified monthly payments: Secure a lower interest rate than other borrowing options, such as personal loans or credit cards. Reduce your number of monthly payment obligations, which can simplify your finances and make it easier to manage expenses
- Tax-deductible interest: Interest paid on a cash-out refinance may be tax-deductible. This can further reduce costs and make it a smart financial move for many homeowners
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