In simple terms, a cash-out refinance replaces your current mortgage with another loan that:
Pays off your current mortgage balance.
Uses the equity in your home to provide additional funds for other purposes.
Get started in just minutes to find out if a cash-out refinance is right for you.
Do you live in Willmar or anywhere in Minnesota? Have you ever wondered how you can carry out 2 important financial tasks at the same time? We found a seamless way to do so:
Essentially, this is what cash-out refinancing loan programs are all about. Of the three popular home equity loan types, cash-out refinancing is one of them; fixed-rate home equity loan is another and HELOC (home equity line of credit) is the third.
Let’s examine the when, the why and the where for cash-out refinancing loan programs.
Homeowners finance and refinance loans for different reasons but why should you do so as a homeowner in Minnesota? If your answer points to only lower interest rates, then maybe it is time to do a re-evaluation and see if it is wise to proceed with that cash-out refinance decision. Here are some metrics to help you look before you leap.
Refinance mortgage rates tend to be lower than the interest rates on other types of debt, so it’s a very cost-effective way to borrow money. If you use the cash to pay off other debts such as credit cards or a home equity loan, you’ll be lowering the interest rate you pay on that debt.
Mortgage debt can also be repaid over a considerably longer period than other types of debt, up to 30 years, so it can make your payments more manageable if you have a large amount of debt that must be repaid in 5-10 years.
If market rates have dropped since you took out your mortgage, a cash-out refinance can let you borrow money and reduce your mortgage rate at the same time.
If market rates have dropped since you took out your mortgage, a cash-out refinance can let you borrow money and reduce your mortgage rate at the same time.
Mortgage interest is generally tax-deductible, so by rolling other debt into your mortgage you can deduct the interest paid on it up to certain limits, assuming that you itemize deductions.
If you use the funds to buy, build or improve a home, you can deduct mortgage interest paid on loan principle up to $1 million for a couple ($500,000 single). But if you use the proceeds from a cash-out refinance for other purposes, such as education expenses or paying off credit cards, the IRS treats it as a home equity loan, and you can only deduct the interest on the first $100,000 borrowed by a couple ($50,000 single).
With a cash-out refinance, you’re putting your home up as collateral. So if that additional debt eventually causes you to default on your mortgage payments, you could lose your home as a result. Other debts such as credit cards, auto loans or may charge higher interest rates or demand faster repayment, but you won’t lose your home if you don’t repay them.
So a cash-out refinance should be approached with caution. It can be a very useful financial tool if you’re confident you can handle the additional mortgage debt and can put the money to good use. But be wary of viewing your home as a bank and source of low-cost loans for routine or nonessential spending, or for risky business ventures – that’s an easy way to get into financial trouble.
Just fill out the quick form below and we’ll take it from there.
By submitting this form I am agreeing to be contacted by a representative of Supreme Lending Houston TX.
How do you know if a cash-out refinance is the right move? There’s no hard-and-fast answer to that question, but you may want to consider refinancing if any of the following situations apply:
Interest rates have dropped substantially since the last time you financed your home.
You intend to stay in your home for several more years.
You can shorten your loan term.
IMPORTANT QUESTIONS TO THINK ABOUT
With a cash-out refinance, you need to weigh the benefit of how you’re going to use the money against the amount of time it will take to pay off the loan. Refinancing may give you a lower interest rate, but if you extend your loan term, you may pay more interest over the life of the loan. Here are some things to think about:
How many years until the end of the term of your current loan?
How long is the term of the new loan?
You can shorten your loan term.
Are interest rates lower than your current financing?
How much cash do you need?
What’s the monthly payment amount?
What’s the effect on your taxes?
What’s the total cost of borrowing?
What’s your break-even point?
Supreme Lending Willmar is one of the best the places in the United States of America for you to get a cash-out refinance loan. We have an extremely fast cash-out refinance loan program for borrowers in Willmar, Minnesota; typically closing within a three-weeks. We will walk you through our 6 step loan process:
1. You can start the application process and a Loan Officer is assigned to you and your application. The application form is available online, via phone, via fax, via email or in person.
2. We will conduct a property appraisal. We will send required disclosures to you during this process. Afterwards, we will send the appraisal to our underwriting department.
3. We compile and process your loan application information. For professional reasons and to prevent errors, this is usually done through email.
4. We evaluate your credit history and credit score to make sure they are in line with recommended industry guidelines..
5. When it is time to close on your new loan, we will prepare and send the necessary documents to the title company. Afterwards, we prepare your Closing Disclosure (plus final closing figures) and deliver them to you to sign within a 3-day period.
6. We offer you after-loan support on the phone.
Visit us here to get started with our cash-out refinance loan program or call us up on (320) 262-8503.