Cash Out Refinancing - Money In Your Pocket
Date: Tuesday, September 30, 2003 @ 05:00 AM EDT
Topic: Credit and Finance
If you want to lower your current mortgage rate, save money and have cash in hand for immediate purchases cash-out refinancing may be just the solution.
What is cash-out refinancing? Cash-out refinancing allows you to refinance your mortgage for more than you owe and then pocket the difference in the form of cash. This can be ideal for funding college education, buying a car, investing or pursuing a business venture. You use it as you need it. There are some similarities between the cash out program and home equity loan programs.
Benefits both loan types have:
• Tax deductible interest* - This can save you hundreds, or even thousands of dollars a year.
• Unlimited uses - Use the money to pay off higher interest loans, finance home improvements, purchase
a vehicle - whatever you want!
• Payment flexibility - With a low minimum payment, you can choose to make a larger payment during some months and then make the small, minimum payment when you need to conserve money, such as around Christmas or during a vacation.
• The closing costs can be financed in the new loan.
How does it work? Here's an example: You currently owe $90,000 on a home that's valued at $160,000. You are seeking to lower the interest rate. You also want $20,000 in pocket-able cash. You refinance the mortgage for $110,000. This leaves you with a lower rate on the balance you owe on the house, and you pocket $20,000 cash to use as you wish.
* Consult your business accountant, financial advisor, attorney or tax advisor to see if these programs are right for you.
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