Let’s start by defining what a cash-out refinance is: it’s simply taking the equity you’ve accumulated on your home and cashing in on it. The gist of it is that you’re replacing your current mortgage with a new home loan.
At the end of the day, you can spend the cash on anything you want. Most people use the income for things like home improvement projects, to consolidate debt, to pay for a child’s college tuition, etc. So let’s go into detail on some of the things you can do with a cash-out refinance!
Your home is a real estate investment. Funding a home improvement project is a great investment for homeowners because it adds value to your property. While most projects like these start around $20,000, adding a master bedroom suite, remodeling a kitchen, or fixing up a bathroom can all be done through a cash-out refinance.
Life happens and sometimes credit card debts pile up. A mortgage is a secured loan and if it has a lower interest rate than your credit card, it might be worth looking into a cash-out refinance. A strategic method for getting rid of credit card debt is to pay off all of your credit card bills and then use the money that was going towards those credit card bills to pay down your home mortgage (on top of your monthly payment).
Paying for a college education can put a major dent in your pocket, but it certainly pays off in the end! If you have a child heading to college, you can use your refi cash to pay for tuition and other associated expenses. Or maybe even consider paying off your own high-interest student loans.
Did you know you can use a cash-out refi for a down payment towards another house? Real estate investments are a quick way to build wealth and generate additional income when used as rental or AirBnb properties.
Even if your initial home mortgage isn’t with us, we can help you with a refinance! Call or email our team today to find out what the criteria is to qualify for a cash-out refinance and how we can help you achieve your home financing goals: (720) 231-6999