Get Cash Out of Your Home
Did you know that the equity in your home offers a ready source of cash when expenses arise? If you need extra cash for home repairs, renovation, college tuition, or other needs, a cash-out refinance may be the answer.
Cash-Out Refinance Vs. Home Equity Loan: What’s the Difference?
When you take out a home equity loan, you essentially add a second mortgage on top of your existing one. It can be a risky move because it places a second lien on your house.
A cash-out refinance, on the other hand, is not a second mortgage. Instead, it’s a new mortgage that replaces your current one. For example, if you owe $100,000 on your $200,000 mortgage, you can refinance for $120,000 and walk away with a $20,000 check.
What are the Benefits of a Cash-Out Refinance?
Why would you choose a cash-out refinance?
- Lower interest rates—You can usually get lower interest rates for a cash-out refinance than for a home equity loan. In today’s housing market, it’s likely that you can get a lower rate than your original mortgage as well.
- Ready cash—The equity in your home gives you an option for large expenses like a home remodel, medical expenses, or college tuition.
- Pay off debt—If you have high-interest debt elsewhere, you can pay it off with cash and benefit from the lower interest rate in your mortgage.
The cash you receive from a cash-out refinance can be used any way you wish. It’s an excellent option for avoiding high-interest debt associated with other types of loans or credit.
Ready to take the next step? Talk to one of our home loan experts today about whether a cash-out refinance is right for you!