Once you own a home and have a mortgage, it is tempting to think your work is done. After all, the home buying process — not to mention the securing of a loan — can be arduous. However, it is important to consistently assess your options in order to save money in the long run. Refinancing is a common tool for mortgage holders to utilize to secure more favorable interest rates and generally alter the terms of their loans. Cash-out refinancing is another type of adjustment that can put some extra funds in your pocket as you find more advantageous rates. In today’s blog, Family Home Loan Texas talks about this tool and why 2022 seems to be a great time to get one.
Understanding Cash-Out Refinance
As noted above, refinancing a mortgage consists of getting a new loan — that replaces your current one — that has more favorable terms for you. This often means a lower interest rate or changing from a fixed-rate loan to an adjustable one (or the other way around). You can also change the length of it. When you receive a cash-out loan, your new mortgage amount is higher than the one you got when first purchasing your home, and you receive the difference in cash. You will have to pay closing costs again, but some simple arithmetic and the help of a loan specialist will allow you to determine if you will, in fact, save money in the long run.
Why They Will Likely Be Popular In 2022
As 2022 gets underway, you will likely hear, if you haven’t already, that interest rates are at an all-time low. If your current rate is significantly higher than this number, refinancing could be an option. Likewise, as houses are appreciating quickly, you could very well have a good amount of equity in your home, perhaps more than you initially expected you would by this point in time.
With a cash-out refinance, especially given the current low-interest rates, it could be advantageous to access some of these funds and then use them as you see fit — whether that is for repairs, major expenses, or even investments. This equity should also make it easier to qualify for a new loan. Really, you are achieving two goals at once; you are securing more favorable loan terms and you are receiving cash for whatever expenses you need. If you do not need the funds for immediate purposes, you could invest this money, and see it go much further than it would be stagnating in your house. Ultimately, you will have to assess your finances to see if this move makes sense for you and your needs.
Contact Us For More Information About Cash-Out Refinancing
If you have considered this type of loan in the past, 2022 is a great time to move forward with it. As with all things related to home loans, we are here to help you at every step of the process. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about how he and his team can help you through all aspects of buying a home.