Cash Out Refinancing

We know that refinancing is an important decision, you need a trusted cash out refinancing company with trusted advisors that will understand your goals.

Now is a great time to convert your equity – rates are low and values are up.  A home equity loan is basically a line of credit secured by your home.  When the line of credit is drawn down, the financial institution providing it places a second mortgage loan on your home until the loan is paid off, after which you can use the loan to finance other purchases.

However, if the loan is not paid off, your home could be sold to pay off the remaining debt. Interest rates on such loans are usually adjustable rather than fixed and lower than standard second mortgages or credit cards.  You may have the option to borrow against a portion of the available equity in your home if the remaining principal you owe on your home is only a portion of its current value.  For example, if you’ve been paying down the principal balance on your mortgage or the value of your home appreciates, you may be able to tap into a portion of your accumulated equity.  Two popular options for doing this are taking out a home equity loan or a home equity line of credit.  Call us today to find the best option for you and your family!  You may have cash waiting for you!

Cash out refinancing is a great way to tap into the equity in your home so that you can pay for anything you want or need; from college tuition to medical expenses to a European vacation.  With cash-out refinancing, you refinance your mortgage for more than you currently owe, then pocket the difference.  Here’s an example: Let’s say you still owe $80,000 on a $150,000 house, and you want a lower interest rate. You also want $20,000 cash, maybe to spend on your child’s first semester at Princeton.  You can refinance the mortgage for $100,000.  Ideally, you get a better rate on the $80,000 that you owe on the house and you get a check for $20,000 to spend as you wish.  Cash-out refinancing differs from a home equity loan in several ways.  Call us today so that we can carefully explain the differences for you.

Current mortgage rates are still at historic lows compared to prior decades.  With mortgage rates still so low, millions of homeowners have decided to refinance in order to trim their housing costs.  But knowing when and how to refinance is a much more difficult decision than deciding you want a lower monthly payment.  We will help you decide whether a refinance is right for you, what steps you should take to prepare for your refinance and how to choose the right lender, product and term.  How much of your monthly mortgage payment will go toward principal and interest over the life of your loan?  How much could you save by prepaying some of the principal?  Find out now by calling our experts today!

If you are asking, “Should I refinance my mortgage“?  We are here to help you make the right decision and discuss the pros and cons.  Home mortgage refinancing can be confusing and time consuming.  Our job is to help you decide if you want to:

1) Lower Your Monthly Payments?

2) Pay Off Your Mortgage Sooner?

3) Reduce Your Interest Rate?

4) Convert a fixed Rate?

5) Cash Out?

6) Refi a loan that is underwater?

Many factors can influence a refinance decision, and you’ll need to evaluate them all. We can help you to determine which type of mortgage loan you qualify for, and whether or not it will be cost-effective in the long run.  There are many variables to consider, which isn’t surprising considering how big a decision refinancing can be.  Let us at CYE go over these factors with you and put together a game plan designed to obtain the best refinance for your home.

If you need more money for retirement, we can see if you qualify for a HECM, which allows you to borrow against the equity in your home without having to make monthly mortgage payments.  If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, and are eligible, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program.

The HECM is FHA’s reverse mortgage program that enables you to withdraw some of the equity in your home with limitations or a single disbursement lump-sum payment at the time of mortgage closing.  A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash.  The equity that you built up over years of making mortgage payments can be paid to you.  However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

A refi will quickly provide cash out that you can use for any reason whatsoever.  How you decide whether a cash-out refi is right for you depends on how much you would save each month and how you want to spend the money.  If you’re interested in borrowing against your home’s available equity to pay for other expenses, you have choices.  One option would be to refinance and get cash out.  Another option would be to take out a home equity loan or line of credit.  To find out which is the best option for you, call our team of experts today.  We will evaluate your current loan, your personal circumstances and advise you if a cash out is right for you!

We know that refinancing is an important decision, you need a trusted cash out refinancing company with trusted advisory that will understand your goals.  A cash-out refinance can typically offer a lower interest rate than a home equity loan.  A cash–out refinance is available on both a fixed rate or an adjustable rate mortgage.  There are two main types of mortgage refinances.  There is the standard rate and term refinance, which allows a borrower to snag a lower mortgage rate or shorten their term, while keeping their existing balance intact.  And then there is the “cash-out refinance,” which allows a borrower to tap into the equity in their home.  When refinancing, if a borrower elects to take “cash out” in addition to their existing loan, the new mortgage balance will be larger than the original. Once the refinance is complete, the new loan will consist of the current balance plus the cash-out amount.  So expect both the size of your mortgage and your mortgage payment to increase in return cash on hand.  Call us now so that we can explain if a cash out refinance is right for you!

How Much Can You Take Out of your Equity?

Cash out refinancing limits are determined by the value of your home.  As a general rule, you can access up to 90% of the value of your home.  The borrowing limits have to do with which loan and which lender you select.  Some loans provide access to almost all of your equity with a higher interest rate.  Together, we will need to calculate estimated loan limits depending on how much you want to borrow and how much you can afford to pay back.

Why take cash out?

• Home improvements
• Future investments
• Vacations and other luxuries
• College tuition
• To purchase another property
• To consolidate and pay-off other higher-interest-rate debt, such as credit cards or auto loans
• For an emergency

You may want a cash-out refinance for debt consolidation, home improvement, or for future investments.  To avoid paying high-interest rate credit cards, you may use cash out to pay off those bills.  Instead of paying a 20% interest rate or higher on a credit card each month, you can pay off that balance using your mortgage and pay a rate of 5-8% instead. You may pull cash-out to make improvements to your home that will increase the value significantly, which over time can increase your equity.  Streamline the refinance process by figuring out what you need and what you can afford to pay on a monthly basis.

Some of the best refinance rates in years are available right now, but rates are going up every day and if you wait too long you may get stuck with a higher rate and a higher payment that you cannot afford.  Our refinance calculator will show you refinance interest rates and annual percentage rate (APR) and potential monthly payments and estimated payment savings for different loan types.  Our advisors use a Cash out refinance calculator to estimate what your payment will be and how much you can afford to borrow based on your goals and your home value. Contact us today and together we will quickly map out a strategy and a game plan for you to help you reach your goals.

Find out if You Qualify

Our advisors will help you to understand the refinancing restrictions and help you to decide which type of refinancing best suits your situation. Before you qualify to refinance your mortgage, we will make sure that you have the equity, the income and credit score that you need.  Before you apply for a new mortgage or a refinance, you need to make sure that you’re in good financial shape.  If you don’t have the financial chops to qualify or have more debt than is allowed for a refinance, for instance, going through the application process will be a waste of time.  It’s possible that you could be approved for a loan, but at an outrageously high interest rate.

Each lending institution has different underwriting guidelines for evaluating a potential borrower; and I’m sure you know that due to the credit crisis, lending standards are now tougher than ever.  When you apply for a home loan, you’re generally judged on the following five categories:

• Income: Do you earn enough to make mortgage payments and is it likely that this income will continue in the future?
• Credit score: How likely are you to make on-time mortgage payments based on your credit history?
• Debt: Will you have enough cash flow left over to make a mortgage payment after paying your other liabilities?
• Savings: Do you have enough for a down payment plus more cash on hand to pay your mortgage if your income is reduced?
• Financial ratios: How much debt do you have relative your income?

We will discuss the cash out benefits limits and the options for taking cash out.  We will help you decide when to refinance, whether it makes sense to wait or to refi now.  Refinancing a mortgage is an important decision, we are here to help take the stress out of the process and to answer your questions.  Within minutes on the phone, we can usually answer most of your questions and help you to get started.  Call us today for a free evaluation as to which refinancing option is best for you and your family!

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