Need a Cash Out Refinance Loan?
A cash out refinance loan can be a great tool to solve some of your financial issues if you have enough equity in your property and if it makes sense to do so. Basically how this works is that you refinance your existing mortgage balance plus whatever cash you need on top of that into a new first mortgage. Your original mortgage gets paid off in the transaction and you start over with a new loan and new terms but you get your cash in hand when you make settlement. Usually cash out refinance loan transactions can be done within 30 to 45 days.
Why should I take out a cash out refinance loan?
There are pro's and con's to taking on this type of debt since it is secured by your home equity and therefore will increase your mortgage balance. If you are refinancing mainly to make home improvements, be reasonably sure the the improvements you make will significantly improve the value of your home. Many people will use a cash out refinance loan to help pay your child's college tuition bill, consolidate other higher rate debts, or use the money to invest. All smart reasons provided they make financial sense. What you don't want to do is blow the money on a dream vacation, purchase other depreciating assets, or do several of these types of mortgage loans in succession. It's a great idea to consult with an experienced financial professional such as a mortgage loan officer at Net Equity Financial who can help you determine the best way to accomplish this, and whether it's feasible or not to consider.Whats involved in the cash out refinance loan loan process
There are a number of factors to structuring these loans correctly depending upon your current debts, the amount of cash you need, and how long you'll need to pay it back. A lender will order an appraisal on your property and a Pa certified appraiser will compile a report and arrive at today's value of your home. If your credit is good, and your income history allows you to borrow more, you can generally borrow up to about 85% of your home's current value. If you've been in your home a while (10 years or more) Often you have been able to build enough equity to accomplish this. Or if you put a lot of cash down when you initially purchased your home, have a shorter term, or have been making regular prepayments.
If you are considering a cash out refinance loan in Pennsylvania, we'd be happy to discuss your scenario with you and see if it makes sense. Call us at 215-741-3131 or click on the box below for a free automated quote.