What is cash-out refi Austin TX? It is a refinance option that lets you tap into your home’s equity for cash that you can use for any purpose you choose. With this type of refinance option, you get a new mortgage loan that is larger than the existing one to convert home equity into cash.
Why go for a cash-out refi? If your current home loan has a higher interest rate than you qualify for with a refinance and/or if you need a one-time cash infusion for a significant expense (e.g. home improvement), then a cash-out refi might be the best course of action to take. This type of refinance option is typically has a fixed interest rates, which appeals to borrowers who prefer predictable payments.
What are the potential drawbacks? There is a possibility that you will pay additional interest amount on both your current balance and the additional amount you borrow if the new loan’s rate is higher. Take note also that you will pay more fees on a cash-out refi Austin TX than you would pay with a home equity loan or line of credit. It is worth-noting as well the cash-out cap imposed by lenders is usually at 80% of the home’s value.
What is the difference between Rate and Term and Cash-out Refinancing? Rate and Term Refinancing provides an opportunity for borrowers to attain a lower interest rates and/or adjust the term of the loan. On the other had, the latter allows borrower to convert home equity into cash by applying for a new mortgage for a larger amount than the previous one.
Is it beneficial to use a mortgage broker when shopping for a cash-out refinancing? Seeking the help of a mortgage broker can offer a significant advantage. They have access to a wide list of lenders available in the market today. They can keep you posted on the best time to go for it, plus, they can also help you understand the process that you might find complex should you navigate the path alone.
For professional help on cash-out refi Austin TX, ask our experts at HomePlus Mortgage today. Call us at 800-810-PLUS (7587).