Is Cash-Out Refinancing the Right Move for You?
As a lot of you know, homeownership is one of the most rewarding activities that you have in your life. Not only that, but it can also allow you to build your wealth tremendously, but it takes hard work and dedication to enter a long-term mortgage. Since the National home prices have increased by around 15% in the past year, a lot of homeowners have decided to partake in cash-out refinancing. While this can make sense for a lot of families, so that they can put their kid through college, renovate something, or pay for an unexpected bill, it isn’t just free money and it carries more risks than it appears upfront.
It is important to make sure that this is the right time for you to cash out. Home prices go up and down all the time, so make sure that you are paying attention to the market and not jumping on the first sight of your home going for a large sum of money. Also, make sure that you use this cash for the right reasons. One too many times a homeowner will use the money to get out of a sticky situation or as quick cash, and then the home prices won't continue on the increasing trend and now they are in financial trouble.
The key to refinancing is to do it at the right time. I know that it is hard to determine that because everyone's life is different, so just keep these things in mind before you pull the trigger. It is not free, closing costs can go up to 5% of the loan amount, which can take a good portion of the equity. Also, there are other refinance options that may not be as risky so look into all the options beforehand. Lastly, homes are a large purchase and require upkeep and maintenance in order to stay pristine. So, if you look after your home equity, you and your family can tap into it if needed.
Everyone's life is different and using a cash-out refinancing plan may be the right option for you. Just make sure that you take all of these things into consideration before making that step!
If interested in refinancing, contact Melinda Niemela at [email protected]