Many homeowners use cash-out refinances for debt consolidation, home improvement, or for future investments. To avoid paying high-interest rate credit cards, homeowners may use cash out to pay off those bills. Instead of paying a 20% interest rate or higher on a credit card each month, you can pay off that balance using your mortgage and pay a much lower rate.
• Home improvements
• Other investments (stocks, bonds, etc.)
• College tuition
• To purchase another property
• To pay-off other higher-interest-rate debt, such as credit cards or auto loans
• For an emergency
• Because they want cash for any number of reasons
Save money by taking advantage of the lowest rates available. Whether you are looking to lower your rate, lower your monthly payment, or tap into your home’s equity, use this FREE self-help tool to determine exactly what type of refinance solution is best for you.
Other homeowners may pull cash-out to make improvements to their home that will increase the value significantly, which over time can lower their loan-to-value ratio and increase the equity in their home.
Others may pull cash-out if they feel they can invest the money at a better rate of return than the mortgage rate.
The question you need to ask yourself is whether it makes sense financially to refinance your current mortgage to take advantage of anything mentioned above.