The most popular current option for refinancing is to take cash out of the home’s equity. When the value of the property has increased and/or the rates have dropped, homeowners can take the difference between the new loan and the home’s appraised value as “cash out.” The benefits vary from borrower to borrower, but it’s often an excellent way to consolidate debt or re-invest into the home by remodeling or improving its value. The proceeds are tax-free which adds to the appeal of this option.
Need to remodel your house or just need some cash for a rainy day? With soaring values, your home probably has significant equity. Convert that equity into a tangible item.
You can borrow large amounts of money and may qualify easier since the loan is secured by your home. A refinance of your mortgage to pay off other debts may allow you to pay off higher rate credit cards.
Features of Home Equity Loans
- Potential tax advantages
- Consistent repayment for the life of the loan
- Ability to consolidate other higher-rate debts
- Flexibility to pay for large planned or even unexpected expenses
- Low competitive rates and fees
- Easy access to funds
The payments will depend on your financial situation and the current market interest rates.