A Cashout refinance home loan is a mortgage that pays off your current loan by refinancing and provides the homeowner with funds at closing to pay off debt, complete home repairs or simply as cash in hand. Recently mortgage rates fell to the lowest they have been in 16 months. This may make it the right time for you to do a Cashout refinance mortgage on your home. The following five reasons reason make it the perfect time to do a cashout refinance.
1) Low Mortgage Rates make it a perfect time to do a Cashout Refinance Mortgage.
As noted above, mortgage rates have dropped significantly over the past year and a half. At the start of 2014, average mortgage rates were between 4.50% and 4.75% for a 30 year fixed rate mortgage according to Freddie Mac’s Primary Mortgage Market Survey (U.S. Weekly Averages). As of October 16th, 2014 Average mortgage rates have now dropped to 3.97% for a 30 year fixed rate mortgage for a prime borrower. This drop in mortgage rates may allow a home owner to save thousands of dollars in mortgage interest over a 30 year home loan by refinancing. With low mortgage rates, a homeowner may be able to receive cash out from the equity in their home and keep their mortgage payment the same or even reduce their mortgage payments.
2) Home Values Have Generally Increased over the past few Years Creating Home equity to Cashout.
Following the mortgage meltdown, homeowners saw the values of their homes plummet dropping as much as 90% in areas like Detroit, MI. For families that had plans of doing home improvements or using the value they have accrued in their home’s equity for college tuition may have missed their opportunity until now. Over the past few years home values have steadily risen year over year is most areas. As home values continue to rebound or even skyrocket in areas like Grand Rapids, MI, now homeowners may finally have the equity to complete their financial goals for a cashout refinance.
Related: Use our home value estimator to research the value of your home and calculate your home’s equity.
3) Many Banks and Mortgage Companies have slowed down Allowing Home Loans to Close Quickly.
In many area in Michigan and the Mid West, home buyers complete their purchases mainly in the warm weather of Spring and Summer. As temperatures begin to drop, homebuyers put their relocation plans on hold until the next season. This cyclical effect of home buying allows banks and mortgage companies to catch up and close mortgage loans quickly in the fall and winter seasons. This may allow you to close your mortgage quickly in as little as 14 days with the right mortgage company.
4) There may be Tax Benefits of Consolidating Debt with a Cashout Refinance.
As you may know, credit cards typically have high interest rates and minimum payments. For some, if you can only afford to pay the minimum payments you may never pay off the credits card loans. An alternative to paying high interest credit cards would be a debt consolidation mortgage with a cashout refinance. You may be able to save thousands of dollars in interest and reduce your overall payments. An added benefit of consolidating debt with a cashout refinance is that mortgage interest is tax deductible whereas you cannot write off credit card interest or personal loans on your tax returns. Speak with your tax professional to see if you are able to benefit from a tax write off with a cashout home loan.
5) Mortgage Programs are expanding Making it Easier to Refinance your Mortgage and receive Cashout.
After the great recession caused by bad mortgage loans, banks and lenders tightened their underwriting guidelines making it very difficult to be approved for a home loan. In general, many banks required credit scores to be 640+ with no credit blemishes in recent years. Now that mortgage companies are becoming more familiar with recent laws and regulations, the industry is seeing expanded credit guidelines allowing homeowners to be approved more easily for mortgage loans. Home loans such as the FHA Mortgage allow homeowners to be approved with as little as a 560 credit score and only 2 years out of a Bankruptcy. With a FHA home loan a homeowner may be able to cashout up to 85% of their homes value to consolidate debt, do home improvements or even get cash back at the closing.
For more information on a Cashout Refinance Mortgage call Riverbank Finance LLC at 1-800-555-2098 or send an inquiry below. Our wide variety of cashout home loans in Michigan may allow you to get the cash you need.