In 2022 Cash (Out) is King
Nothing lasts forever… Including tremendously low interest rates. Even if it is ever-so-slightly, in 2022 interest rates are expected to rise. Over the past few years though, home values have appreciated at an incredible pace. For the refinance sector, these factors draw the majority of consumers away from rate and term refinances and point them toward a cash-out focus instead. Most current homeowners have built up quite a bit of equity, which should theoretically make qualifying for a cash-out refinance fairly easy for most. So is it the right move for you? We’ve laid out the most common uses for this type of refinancing so you can explore the possibilities. Like always, your team at Cambria Mortgage is here to help and support you in your home financing journey. Don’t hesitate to reach out with any questions or to begin the process.
Current Home Upgrades & Renovations
If you love the home you’re in, but would like to make a few minor (or major) tweaks, you aren’t the only one! Home renovations are one of the top reasons people pull cash out through refinancing; most of the time it’s a smart move, too! Not only can home upgrades transform your home into what you’ve been envisioning, it can also increase the value. Projects like updating flooring, upgrading the kitchen and revamping bathroom fixtures are some of the best ways to increase value.
Preparing for Large Expenses or Paying Off Debt
The pandemic not-so-subtly showed us that we can’t predict the future. This has motivated many people to hone in on their finances and put a heavy focus on becoming financially secure. A cash-out refinance may help if you are looking to free up some room in your monthly budget. Consolidating higher interest debt like credit cards, student loans and personal loans with a cash-out refinance could be a step toward a better financial future. You’ll definitely want to consult with your tax advisor too, often the mortgage interest is tax deductible – an added bonus!
Buying a Second Home
If the pandemic has shed some light on your desire to venture out of your current surroundings, we get it. Owning an investment property might be for you! The financial benefits of owning a rental property include having an additional source of income, offsetting the costs of owning a vacation property, potential tax deductions and more. Using the cash from a cash-out refinance for the down payment can save you money in the long run by lowering the monthly payments. This could be the boost you need to make your dreams of beach-front life a reality!
As you can see, there are many scenarios where a cash-out refinance may be especially beneficial. Everyone’s situation is different; we recommend consulting a Cambria Mortgage professional who can help you determine if a cash-out refinance is right for you: www.CambriaMortgage.com / 952-942-0110.