Are you thinking of getting a home equity loan but have less then favorable mortgage terms, a cash out refinance might be a good solution. This method, allows you to utilize the cash value of your homes equity, while receiving the added bonus of having a lower monthly payment.
The mortgage you have been paying on is a source of instantly available cash that can be used by you in exchange for some of the equity you have built up (lets you get some cash from the increasing home value of your current home, without having to sell it). As far as the easiest way to acquire a sizable amount of instant cash, a cash out refinance is often a great low cost, solution of using your homes equity. The advantages of a cash back refinance are often greater then other options such as a home equity loan, second mortgage, or extended lines of credit.
The Basics Of A Cash Out Mortgage Refinance
All refinancing is, is taking a new loan with better rates, and for an amount greater than your currently owe. For example. If you owe $50,000 on a $75,000 home and refinance into a $65,000 loan, you can use that $15,000 difference for whatever you want. This is better due to the fact that you still only have 1 mortgage on your home. Also, theres a good chance your credit has improved since owning a home, therefore you will qualify for better rates.
How much can I borrow with a cash out mortgage refinance?
Typically, you can borrow up to 100% of your homes value. There are even some lenders in the market who will give you more than that. This, however is not recommended. You are risking losing your house for some quick cash, You need to weigh all the risks before refinancing with a cash back option.
Make sure to shop around for the best mortgage rates and terms.
If you decided a cash back refinance on your mortgage is right for you, it is verysmart to shop your mortgage terms around to a variety of lenders. Often you will find a much better rate or terms with one lender over another. Internet ads for refinancing are a good way to start this process. Shopping for quotes is easy these days.
-M Petrone
-Refinancing FAQ Advice

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