What is a Cash-out Refinance?
Essentially, a cash-out refinance is when you use your home’s equity to refinance for more than the outstanding loan balance owed on your current mortgage. Then, after paying off your original mortgage, the amount left over is used to payoff your other debt or for other needs.
Is it right for me?
Sometimes, even the most budget-conscious homeowners sometimes find themselves struggling with debt or lack of cash.
Now that home values are on the rise, you may be able to use your home equity to consolidate higher interest debt such as credit card debt, car loans, personal loans, etc. The equity can be used to provide cost-effective cash for other needs, like remodeling, tuition or business expenses.
Typical benefits of a Cash-out Refinance:
- Lower interest rate and lower monthly payment
- Debts are consolidated into only one monthly payment (a cash-out refinance replaces your first mortgage)
- Cash available for other needs (e.g. remodel, tuition, business, etc.)
- Payments may be tax deductible
- Improve your credit and your monthly cash flow
Note: By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
Everyone’s situation is different, so we strongly recommend you Get Started by contacting an experienced GMFS Mortgage Loan Officer to assess your situation and determine the best options for you.