When is a Cash-Out Refinance a Good Idea?

As with most financial decisions, the decision of whether or not to refinance your mortgage is not one to be entered into lightly. When looking at what type of refinance options you have, a cash-out refinance may be the right choice for you.

First you should think long and hard on what it is you’re spending your money on. Many people choose to use the proceeds from a cash-out refinance as an investment opportunity. Using the money you get from your refinance towards a new property could prove lucrative to you as an investment or be used towards the purchase of that second home you’ve always wanted. Some people may use the cash to pay off credit card debt. Be careful here though, you may lower your interest rates but you could be taking longer to pay off the mortgage.

Another investment option for a cash-out refinance would be to take the cash and put it right back into your house. When you first purchased your home, perhaps you couldn’t afford as large of a house as you desired, your dream kitchen or the patio that you always wanted. Now that you have the finances to do so, why not add that second floor, update your kitchen, add some hardwood floors or build a deck for you, your family and friends to enjoy?

If you have questions about the refi process, contact us below or at 708-531-8388.