A cash out refinance is one of the quickest and easiest to access the equity you have built up in your home. Home equity is what makes buying an attractive option when compared to renting, because with a rent payment the money goes in your landlord’s pocket, while a mortgage payment on a home you own turns that money into value in the house that you own rather than the bank. This can create a situation where you might have money essentially stored in your house, and a cash out refinance is the way that you can access that piggy bank when you need it. Let’s say you need to repair your roof or pay your bills, in that case you can access your home equity by working with a mortgage professional to arrange a cash out refinance.
How Does a Cash Out Refinance Work?
The first step in a cash out refinance is a discussion with a mortgage professional about what options work best for you. They will be able to tell you if your situation qualifies, and if you have enough equity in your home that withdrawing some is an option. Part of this process might involve an appraisal on the value of your home, which could have changed drastically since you purchased it. The cash out refinance process can also include a change in the interest rates on your mortgage, which could be a major benefit if rates are good.
Wherever you are in the home refinancing process, the first step begins by meeting with a professional lender like me.
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Sources:
https://www.nerdwallet.com/article/mortgages/refinance-cash-out
