Cash-Out Refinancing

Cash-out options

When I mention cash-out refinancing to clients, the response is usually the same – “rates are too high” followed by “why would anybody refinance out of a 2% or 3% rate into a 7% rate?”.

The right question is not “which is the better rate?” but, rather, “are you in a position where a cash-out refinance makes the most financial sense?”

Affordability is one of the largest concerns in our country right now. People are living on much less compared to their outgoing expenses. Many have more debt than they have had in a long time, and their car payments are larger than they used to be. They may have college loans, home repairs, vacations, dental expenditures, homeowners’ insurance, flood insurance, and windstorm coverages that are costing them more than they would prefer – especially near the coast.

People need money, and the #1 asset they have is the equity in their home.

According to Core Logic, the majority of homeowners have a sizeable amount of equity:

  • 59% of homeowners have more than 50% equity
  • 32.25% have 25-50% equity
  • 8.75% have less than 25% equity

When you consider the more than 50 million first and second mortgages, the opportunities are even greater than you may think.

Even doing a HELOC against a property that has a very low first mortgage, or is owned free and clear, would be a great option for those who want to have access to their equity, even if they don’t plan to use it right away. It’s best to have access to your assets before you need it because, many times, when you need it, it is no longer an option.

The bottom line is whether you need to consolidate, get cash out, or just want access to your assets, I am here to help you with that option if you need it. Schedule a free consultation today.

– Julie