While home values continue to increase, tapping into home equity by refinancing remains a solid option for homeowners to access cash. Here are some reasons to consider a cash-out refinance:

Renovations

One of the most common reasons homeowners look at a cash-out refinance is for home renovations. Using the equity built in the home to access cash for renovations is a smart way to use the equity while building more value in the home. With the tight housing market and low inventory, this can present homeowners with a way of getting the features they desire out of their home without having to go through the process of buying and selling. Turning your current home into your dream home is a great use for a cash-out refinance.

Purchasing a Second Home

Because you will pay interest on the life of the loan, it is smart to use the funds for a long-term investment, such as a second home. Using the cash from the refinance for a down payment on vacation or investment property can save you money in the long run by lowering the payments for a second home. Even though a cash-out refinance can be used to purchase a second home, keep in mind this may not be the best option for your particular situation. Our dedicated Mortgage Consultants are here to discuss options with you and can always help you find the right product for your needs.

Paying Off Debt or Large Expenses

Another way to use the equity in your home is to take the cash and pay off high interest debt or large expenses. With interest rates remaining near historical lows, it is possible to refinance your mortgage at a low rate and access the illiquid funds to pay off credit cards or large expenses such as college tuition or medical bills. This is often an attractive option due to the low interest rates of a mortgage versus those on unsecured personal loans, student loans or credit cards. You will also want to consult with your tax advisor as often the mortgage interest is tax deductible.

Getting Ready for Refinance

If you are thinking about a cash-out refinance, the best thing to do is call Cambria Mortgage to learn about the steps to take to get yourself the best rates and the most cash. One of the first things to look at is your credit score. Typically, the higher your credit score the better the rate. Even if your credit score is not where you would like it to be, your Mortgage Consultant can give you options. Another big piece of the refinance will be the appraisal on your home. Before the appraiser comes, make sure to complete small home repairs or improvements that will help the value of your home. The best thing you can do for yourself, however, is to act quickly while rates remain low.

Call Cambria Mortgage

To get started, call Cambria Mortgage at 952-942-0110 or visit CambriaMortgage.com. Our team of experts will provide personal, hometown service with sound advice and impeccable attention to detail at every step of the process.