Mortgage-Refinance Loan Can Put Cash in Your PocketDo you need cash? Here's a mortgage for you. If you are not in a good position to take an equity line of credit on your home, because you have not built enough equity or a poor credit situation is making bankers steer clear of you, altogether, there is another option -- the cashout refinance. This loan does what the equity line does in most cases, but it is not an interest-only loan, and it has conventional mortgage terms. The advantage for people without enough equity and less than perfect credit is you can get at what little equity you do have by refinancing to a new conventional mortgage, taking cash out at the close of the loan. Here's how it works. Let's assume you have a home valued at $110,000. You owe $86,000, and you would like to get $8,000 in cash to pay off two small credit cards with high interest and to do some minor rehab work on you home. With your B credit rating, banks won't give you 100 percent of your equity or even 95 percent, so an equity line won't work. However, you will qualify for a 90 percent cashout refinance loan. In order to keep your costs down, you combine this strategy with another one, an adjustable rate mortgage, and this helps you maintain a low monthly payment. You need about $4,000 to close the loan (remember it's a conventional mortgage with all the closing costs -- equity loans can be closed with no costs at all). The closing costs, though, will be financed into your new loan, so you don't have to come out of pocket with any money. So, you get a new mortgage for $99,000, which pays off your old fixed rate mortgage loan, covers the closing costs and, best of all, leaves you with $9,000 in cash -- $1,000 more than you actually need. The ARM rate is probably one percent less than your old fixed rate, so your payment will stay close to what it was. Plus, you eliminate monthly credit debt, so you have created even more cash! This is just an overview of a very powerful loan. Mark Barnes is the author of the new novel, The League, the first work of fiction, based on fantasy football. He is also an investment real estate and home loan finance expert. Learn more about his suspense thriller at http://www.sportsnovels.com Get his free mortgage finance course at http://www.winningthemortgagegame.com
MORE RESOURCES updated Tue. April / 23 / 2024 Should You Refinance Halfway Through Your Mortgage? Bankrate.com 10-year refinance rates: What to know about the current market CNN Underscored 15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider Will Interest Rates Go Down in May 2024? | Mortgage Rates Forecast The Mortgage Reports How to Refinance Your Mortgage NerdWallet Average Mortgage Interest Rates: Mortgage Rates by Credit Score, Year, and Loan Type Business Insider Mortgage Rates This Week NerdWallet Loan Modification Vs. Refinance Bankrate.com 30-Year Mortgage Refinance Rates Business Insider Mortgage Interest Rates Today, April 22, 2024 | The Still-Hot Economy is Keeping Rates High Business Insider Mortgage Interest Rates Today, April 21, 2024 | Rates Remain Near 7% Business Insider Mortgage Interest Rates Today, April 19, 2024 | High Rates Make for a Challenging Homebuying Season Business Insider How To Choose The Right Kind Of Refinance For You Bankrate.com The best mortgage lenders for refinancing in April 2024 CNN Underscored Mortgage Interest Rates Today, April 20, 2024 | Rates Remain Elevated, but They Could Fall Later This Year Business Insider Should You Refinance Your Mortgage In 2024? Bankrate.com How To Refinance A Rental House Bankrate.com Mortgage Refinance Rates: Compare Current Rates Business Insider Best Mortgage Refinance Lenders In 2024 Bankrate.com Current mortgage refinance rates CNN Underscored How To Get A Home Equity Loan With Bad Credit Bankrate.com Best Mortgage Refinance Lenders of April 2024 Business Insider When to Consider Refinancing Your Mortgage Business Insider Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Mortgage Rate Forecast February 2024 Bankrate.com Refinancing a Home Equity Loan (2024 Guide) MarketWatch How Soon Can You Refinance a Mortgage? NerdWallet Mortgage Rate History: 1970s to 2023 Bankrate.com 30-year refinance rates: What to know CNN Underscored Current 15-year refinance rates — and lenders that offer them CNN Underscored Best Refinance Lenders of April 2024: Refinance Your Mortgage The Motley Fool When to Refinance Mortgage: Is it Time? - Buy Side from WSJ The Wall Street Journal Pros and Cons of a Cash-Out Refinance Bankrate.com Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider What Credit Score Do I Need To Refinance? Bankrate.com Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau The Best Mortgage Refinance Rates in Canada NerdWallet Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider Mortgage Interest Rates Today, April 16, 2024 | Rates Remain Elevated After Last Week's Spike Business Insider CFPB Releases Study of Refinance Mortgage Loans Between 2013 and 2023 Consumer Finance Monitor
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