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Still-Low Mortgage Refinance Rates Offer Attractive Cash-Out Options
by Joe Taylor Jr.
CMR Columnist
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Despite a series of measured interest rate hikes by the Federal Reserve, today's mortgage refinance rates remain at generational lows. Mortgage experts suggest that homeowners can still exercise their cash-out options to get the full benefit of America's thriving real estate market.
Common Uses of Cash Out
Unlike other refinance home loans that allow borrowers to latch on to low mortgage refinance rates, cash-out options "reset the clock" with a new loan and get money they want or need to pay for other expenses. Most borrowers exercise their cash-out options in situations where they want to:
- Divert extra equity from a home into a potentially rewarding investment, like a family business
- Free up extra liquid funds to make a down payment on a new home
- Get cash through low mortgage refinance rates to pay off higher-interest debt
Your Lender Holds the Key to Cash-Out Options
Lenders really do want to offer you refinance home loans. The fact that you own a house reduces their risk, and competitive mortgage refinancing rates allow competitors to poach customers from each other. If you want to take cash out for home repairs or improvements, ask your lender about opening up a new line of credit or "rolling back" your current loan to free up some cash. If you simply want to enjoy the cash-out option after watching your property grow in value, a cash-out refinance home loan preserves your wealth.
Exploring Your Cash-Out Options Requires Homework
Even when dealing with your current lender, taking out a cash-out refinance home loan is much like starting from scratch with a new mortgage. Make sure your credit report is updated and free of errors. Likewise, avoid opening or closing too many other credit accounts in the months leading up to your refinance. Stable credit and on-time payments to your other lenders will open up the most cash-out options for you.
Sources
EHow
Newswire Today
About the Author
Joe Taylor Jr. coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.
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