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
What is a Cash-out Refinance for Debt Consolidation?
With a cash-out refinance for debt consolidation, you can tap into your home equity by refinancing and receiving cash to settle outstanding or high-interest debts.
With PacRes Mortgage, if you opt for a cash-out refinance to consolidate your debts, you'll specify which debts to clear using the cash-out funds; once the refinance is approved, PacRes Mortgage issues checks to pay off your creditors, and your new mortgage absorbs these debts; in essence, after completing the debt consolidation cash-out refinance, you'll make monthly payments solely towards your new mortgage balance, eliminating the need to manage multiple debts with varying interest rates.