Mortgage interest rates are beginning to rise above the low levels homeowners have been enjoying for the past several years. If you have been procrastinating about refinancing your home, now is the time to take advantage of historically low interest rates. There are many reasons you could be considering to refinance your mortgage. The main reason is locking in a lower interest rate; however, you may also be able to borrow against equity in your home to pay off other debts.
Consolidating high interest debt is an effective way to save money using equity in your home. If have equity in your home this equity is a practical method for eliminating your higher interest debt. Consolidating this debt using your home offers tax advantages that other forms of lending does not.
It is a fairly simple process to refinance your mortgage and cash out equity during the process. As a homeowner you should do your homework first and shop around for the best mortgage deal. When shopping for a mortgage, you are looking for the loan with the best interest rate, most flexible terms, and lowest lender fees.
To cash out equity in your home you will need to qualify for enough to pay off the balance in your existing mortgage, plus the amount of equity you wish to borrow. Once you qualify for this amount you will receive the excess balance at closing.
After you receive this money you are free to do with it as you see fit, it is after all your money.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
