In general, one usually charges to pay off other debts and consolidate them for monthly savings. Some people just want to have extra money to do remodeling projects or to take a dream vacation. The reasons for cashing in on our house are as varied as the families taking out the loans!
One school of thought is that the equity in your home does nothing for you while you are there. Especially in the decline of the current real estate market. The average depreciation on home values this year has been 13% nationally. That’s money lost for those who have equity in their homes! Consider that by taking out as much cash as possible and investing it in lucrative ventures such as stocks, other business ventures, other real estate, etc., one can use the capital as a means of earning more money.
The cost of taking the money must be weighed against the ability to pay it back and make a profit on the money taken against the mortgage on the home. We’ve seen calculations showing that by taking the equity out of your home and using those funds to make more money, you can shave up to 15 years off the life of the loan. It takes a good game plan and a very tight hand to pull off, but for many this concept may hold the key to a future of self-employment and early retirement.
For others, owning the home is the main concern. They want to pay off the house as soon as possible just for the pride of knowing that they own their home and don’t have to share ownership with a bank or lender. The methods mentioned above are one way to accomplish this in record time. If you don’t have the knowledge or willpower to do so, then a cash-out refinance may not be for you.
The number one reason to do a cash-out refinance is to save money each month by paying down other debt. Collecting and paying car loans, credit cards, student loans, medical debt and other bills not only saves money each month, but also increases your credit score. The key to saving money is making sure you get the lowest rate possible on your new loan. It’s important to work with a reputable company that can purchase the lowest rates possible on your new loan. For many families in the US, doing a cash-out refinance frees up monthly expenses and allows them to finally be debt-free and save money each month for a rainy day.
One cannot stress enough the situation we find ourselves in with our US real estate market. With equity disappearing faster than most might have predicted, it is vitally important to act quickly if you are considering a refinance in cash in Florida. Our market is shrinking at a much faster rate than the national average. Some areas of Florida are seeing values decline at a rate of 3% per month. Don’t leave equity on the table if you’ve been thinking about refinancing NOW is the time.