3 Ways to Use a Refinance
If you’re a homeowner, you have more at your disposal than you may realize when it comes to achieving your financial goals. One option that may help you cash in on your home’s current equity is called a “cash-out refinance”. This is where you refinance your home at a loan balance higher than your present amount with new loan terms. By taking the loan amount up higher, you’re able to pay off your existing mortgage, cover your costs, and “cash-out” the remaining difference to meet your financial goals.
Here are three ways we have seen members utilize our cash-out refinance option.
1. Consolidate debt.
One of the most common ways cash-outs are used is to pay off existing debt, like credit cards, auto loans, or student loans. The greatest perk is the ability to consolidate all of your payments into one, and potentially reduce your overall monthly payment. This can eliminate the need to have multiple debt payments at varying interest rates to different payees—it’s all coming out of your same predictable monthly payment.
2. Make a big purchase.
Sometimes you need access to a larger amount of money. For example, college. Using your home’s equity through a cash-out refinance may give you a lower interest rate than a, say, personal loan. An added bonus is that because you’re using one mortgage as the source, your payments will stay in one place.
3. Fund home improvement projects.
Another well-known use for a refinance is to pay for a home renovation. Maybe you want to make your house feel more like home by completing a remodel. Or you’re eyeing a future sale and need to complete some high ROI projects in hopes of boosting your property value. Either way, a cash-out refinance can help give you the capital you need to get the job done.
And to get even more from your mortgage, remember that a CommunityAmerica home loan qualifies you for a bigger potential Profit Payout. Members with a mortgage in 2018 earned an average Profit Payout of $300. Call 913.905.3799 to connect with our mortgage team and start building your future.