Mortgage Refinance Should You Take Out All Your Equity

Mortgage Refinance – Should you​ Take Out All Your Equity?
As more lenders offer the​ option to​ borrow 100percent of​ the​ value of​ property,​ homeowners are finding themselves faced with the​ question of​ how much they should borrow .​
This is​ especially true if​ you’ve established some equity in​ your home and are now looking toward a​ mortgage refinance .​
So should you​ take out a​ loan that equals 100 percent (or more) of​ the​ value of​ your home? Weigh your options before you​ make this decision.
The fist thing to​ consider is​ why you​ would want to​ refinance at​ 100 percent .​
Do you​ have a​ good use for the​ money or​ would it​ just be nice to​ have it? If you’re looking at​ buying something or​ paying off something,​ that home equity could be put to​ good use and the​ mortgage refinance at​ 100 percent of​ the​ value of​ your home could be a​ great idea .​
For example,​ if​ you​ have accrued significant credit card debt,​ you’re probably paying several hundreds of​ dollars each month in​ fees and interest .​
Paying the​ minimum monthly payments will hardly even make a​ dent in​ the​ amount owed and you’re likely going to​ pay thousands over the​ course of​ the​ debt .​
Instead of​ plodding along with those monthly credit card payments,​ a​ mortgage refinance could give you​ the​ money you​ need to​ pay the​ debt off completely .​
As a​ rule,​ you’ll be paying a​ much lower interest rate on​ your mortgage refinance than on​ the​ credit card debts.
Don’t forget to​ consider the​ amount of​ closing costs associated with your mortgage refinance,​ and also keep in​ mind that you’re going to​ be making a​ larger monthly house payment or​ making those payments for a​ longer period of​ time .​
Be sure you​ can meet those requirements.
You may also find that the​ equity can be put to​ good use for college tuition,​ buying a​ new car or​ even financing something you’ve been unable to​ afford any other way – a​ vacation or​ a​ down payment on​ a​ vacation home .​
You’ve worked hard to​ accrue that home equity and some people feel that they should put that asset to​ work .​
a​ mortgage refinance will allow you​ to​ do just that .​
There’s no doubt that your home equity is​ an​ asset .​
There’s also no doubt that many people simply accept the​ fact that they’ll make a​ mortgage payment for their entire lives .​
However,​ keep sight of​ the​ fact that you​ may not always have to​ make those mortgage payments if​ you​ put your efforts toward paying down the​ loan .​
Instead of​ a​ mortgage refinance,​ it​ may be time to​ focus on​ making some extra payments.
At the​ end of​ the​ day,​ only you​ can decide which course of​ action is​ best for you​ .​
If you​ do decide to​ refinance your mortgage,​ be sure that you​ have all the​ information you​ need to​ take this step wisely.

You Might Also Like:

Powered by Blogger.