Cash-out refinancing is a popular option that people use to utilize the equity built up in their home for immediate cash to use as they wish. It is different from a home equity loan in that a cash-out refinance is a replacement of your first mortgage. Interest rates are typically lower on a cash-out refinance versus a home equity loan as well.
With a cash-out refinance, you are refinancing your current mortgage for more than you currently owe and taking the difference at closing. Here's an example: say you owe $100,000 on a $250,000 home, and you want a lower interest rate. You also want $50,000 in cash, maybe to spend on college education expenses, unexpected medical expenses, etc. You can refinance your mortgage for $150,000, get a better interest rate on the $100,000 you owe and receive a check for $50,000 towards the expenses you wish to pay.
There has never been a better time to drastically reduce your mortgage payments! Mid-Island has helped many homeowners save hundreds per month by consolidating their debt into one low monthly mortgage payment. These savings can translate to tens of thousands of dollars you could be saving on your current mortgage! If you're in need of a better way to manage monthly expenses, contact one of our mortgage professionals to discuss your refinancing options. You can reduce your monthly obligations, keep more money for yourself, and you may also enjoy tax benefits.*
*consult with your financial advisor or tax expert.