Looking to boost the amount of cash you have available in the midst of the COVID-19 (Coronavirus) crisis? If you have equity built up in your house, a cash-out refinance might be an option to consider.
A cash-out refinance allows you to refinance your mortgage and use it as a way to borrow money. Essentially, once this process is done, you can get a check and the amount you owe on the house increases based on how much you borrow, plus any other fees that may have been rolled into the mortgage.
With mortgage rates still hovering low, analyze if this may be the right move for you.
The funds could be used to consolidate debt, lowering your credit utilization ratio, boost equity through a home improvement project and lower your rate at the same time.
Carefully look at the balance between the risk of pulling out money with a refinance v. the need for cash, however. Pulling out cash could increase your rate since the money you pull out is going to be tacked onto your existing loan. Additionally, it all depends on the market value of your house.
If you decide to do a cash-out refinance, keep in mind that it typically comes with more strict underwriting requirements and can come with higher fees or interest rates.
There are various avenues to take when it comes to a cash-out refinance and it is important to be completely educated on the pros and cons. If you are interested, consider setting up a consultation with us. Our mortgage professionals have decades of experience with extensive knowledge of the ins and outs of cash-out refinances. And if you need anything reviewed from a legal standpoint, our real estate attorneys have you covered.
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