What is a Cash Out Refinance?
Need some money but you’re not sure how to get it? Maybe taking out a second mortgage isn’t the best idea? Use cash out refinance instead to get the funds you need into your hands. Your home can work as a bank of sorts, providing you with the equity you need to give you the cash you want in times of necessity. Cash out refinancing provides you with this option. Cash out refinancing allows you to refinance your mortgage and keep the difference.
Things to Know Before you Consider Cash Out Refinancing:
- Cash out refinancing will pay off your existing mortgage.
- Your interest rates may or may not be lower than your original interest rates.
- Cash out refinancing is only worthwhile if it would save you money, not cost you more money.
- You may be able to shorten your loan term if you decide to use cash out refinancing.
- Before you decide to use cash out refinancing, talk to your lender about the risks vs. the benefits to make sure that a cash out refinance is the smartest decision for you, based on the length of your mortgage and your current interest rates.
- Consider how much cash you need before discussing the refinance with your lender. Would there be a less risky way to take out equity, or is the refinance the only (and best) option for you?
- Refinancing can also make it easy for you to consolidate loans and simplify monthly payments.
Need more information about a cash out refinance versus other ways to borrow equity? Talk to a qualified lender at Paramount Equity to get answers to your questions and decide whether refinancing is the best option for your needs.