Mortgage Refinance – Remodel your Kitchen!
Refinancing a mortgage is when a borrower gets a better interest rate and/or loan term. A borrower can achieve lower monthly payments and if they qualify, use their equity to obtain money that can be spent by the borrower. There are several pros and cons of refinancing a mortgage and we can help determine if this is right for you.
When you refinance your mortgage, you are essentially trading in your old loan for a fresh one with a new interest rate and mortgage term. Cash-out mortgage refinancing lets you refinance your mortgage, borrow more than you currently owe and keep the difference as cash. It’s one way to unlock the equity, or ownership, you’ve built in your house. Rates have just lowered again! Now is the time to refi or buy.
Cash-out refinance: With this type, you can use the funds for anything you want, like remodel your kitchen, bathrooms add on to the home. Do any upgrades, repairs you have been wanting to do.
Consolidate higher-interest debts. A potential good use of a cash-out refi is to consolidate high-interest debt, such as credit card debts and personal loans. There’s also a potential tax benefit as mortgage interest may be tax-deductible, while interest on personal loans, credit cards and auto loans often aren’t. However, be sure to look at the total financing costs, not just the interest rate.
Make home improvements or repairs. Using the money to remodel or expand part of your home, or for critical maintenance, could pay for itself by raising the home’s value. However, don’t rely on a cash-out refi for a quick fix during an emergency. The process could take months to complete.
Limited cash-out refinance: As the name suggests, you can only use the funds from this transaction for a few, limited purposes, including paying off your closing costs.
Mortgage refi eligibility
Now is a good time to refinance, there are a few steps you’ll need to take to actually move forward.
First, you’ll need to know a few key numbers. Your credit score is key, as it will partially determine the rate you are able to get. Second, you’ll need to know your home’s current value, which can be found through research on online real estate sites.
Next, start researching mortgage rates. Once you’ve found a rate that makes sense to you, you’ll need to gather all of the documentation relevant to your mortgage: bank statements, pay stubs, and anything else your lender requests. Finally, you can lock your rate in with your lender.
For more information on refinancing contact us today at 714-323-8823.