Financial advisors all over America are referring homeowners to mortgage companies like Rock Mortgage to discuss cash out refinance options because they know how difficult it is to create wealth while carrying around large amounts of consumer debt.
Not all debt is created equal.
With equity levels rising to recordhighs1,homeowners can use their home equity to payoff high interest credit cards, student loan debt and other types of consumer debt that often come with high interest rates and penalty fees.
For many Americans, owing money on a mortgage is the lowest interest debt option with the best rate of return available. In addition to lower interest rates, current tax laws allow the ability to write off interest that is tied to your primary residence, making a home equity loan even more attractive.
When to cash out refinance?
With home prices on the rise2in Texas and around the country,existing homeowners are now at a distinct advantage to restructure their mortgage payments and withdrawal funds from the equity in their homes for more pressing financial investments.
For example, Americans carry as much as $8000 to $40,000 in unsecured credit card or student loan debt can roll these items into a mortgage payment,saving as much as $200 to $2000 per month and reducing the number of open or delinquent lines of credit on their credit report.
Cash out refinance and home equity loans are available to homeowners who have owned their home for at least 5 to 7 years or those who have lived in their home at least three years and who paid a down payment of more than 25% at closing.
Word to the wise.
This debt restructuring option does not eliminate existing debt but moves it to lower interest debt account affiliated with your home mortgage. Savings are a result of lower interest payments and access to funds already invested in your home. Which is why, many homeowners will consider this option in order to pay for necessary repairs and renovations to their home. Be aware when pursuing a cash out refinance or home equity loan that your mortgage payment or overall home loan amount may increase, but savings are gained in paying off higher interest debt or investing available funds in higher return options.
Speak with a financial advisor or mortgage lender to determine which options best serve your financial situation.When you’re ready, the certified mortgage professionals at Rock Mortgage are here to help. Call Rock Mortgage today at 832-230-3067or visit www.rockmortgagehouston.comfor a no pressure consultation.We look forward to speaking with you!
- Home equity hits record high, and here’s how homeowners are spending it, CNBC.
- Texas Housing Prices on the Rise, Texas Comptroller.
