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 In Common Questions, Refinancing your Mortgage

If you are like many people with a mortgage, you have a lot of debt in addition to your mortgage.  Did you know that you can refinance your current mortgage, probably at a lower rate than you are paying now, and also get cash back when the loan funds?  Many people use that extra cash to pay off their other, non-mortgage debt, and they lower their total monthly bills by many hundreds of dollars.  

Here’s what you need to know.

You can refinance your current mortgage and take cash out up to 80% of the appraised value of the house with a conventional or FHA loan, and up to 100% of the value with a VA loan.  With house values going up and up for years now, the value of your house could be considerably higher than it was when you purchased it.  That money belongs to you, and you can use it for anything you would like.  

Here’s an example of how much money you could have.  If the remaining balance on your current mortgage is $300,000, and your house is now worth $500,000, you have $200,000 in equity in the house.  With a conventional cash-out refinance, you can go up to 80% of the current value of the house, so you could get a new mortgage for up to $400,000, which is 80% of the current $500,000 value.  Since you owe $300,000, that leaves you with $100,000 in cash, minus the closing costs for the refinance.  There’s nothing that forces you to get a new loan for that much, but if you wanted to, you could go that high.  

Add up the minimum payments on your credit cards and other debt, and imagine what you could do if those debts were paid off and you didn’t have to pay them every month.  You could use that extra money for anything you’d like: pay down your mortgage faster, pay for home improvements, send the kids to college, go on vacation, or even use it as a down payment on a vacation home or investment property.

If you would like to see how easy it is to get at the equity you have built up in your house, and how easy it is to use that equity to make your financial life better, contact us today.  It doesn’t cost a thing to find out, and we take care of everything.

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