Atlanta, Georgia -
Moreira Team | MortgageRight, a company based in Atlanta, GA, has explained what is cash out refinance and its benefits. This home financing company, which is assisting homeowners to find the best alternatives for getting a cash out refinance, has recently published an article that focuses on why a cash out refinance can be a great option for homeowners. This is because when the homeowner will have a new home financing arrangement for a higher amount to replace the existing financing deal. And the difference between the higher borrowed amount and the previous financing arrangement is taken out by the homeowner in the form of cash that can be used for whatever purpose.
Alvaro Moreira, Director of Strategic Growth at Moreira Team | MortgageRight, says, “There are two primary advantages to cash-out refinancing. First, you can convert your home equity specifically into cash. Second, you can get a new mortgage with a lower interest rate locked into place. As home values keep going up year after year, and with mortgage rates close to historical lows, now is a good time for many homeowners to think about cashing out any equity that they have.”
They also want to point out that there are a number of things that homeowners need to know about cash out refinance. First of all, cash out refinance rates can be somewhat higher compared to the rates used for traditional refinancing. Second, the specific rate will be based on both the homeowner’s credit profile and the amount of cash that is taken out. Third, the homeowner may be able to cash out as much as 80 percent of the total home equity. Fourth, the new financing arrangement will actually be larger than the former deal, which means a larger overall interest will need to be paid. And finally, because the rates for home financing are typically lower compared to the rates for credit card or personal financing, cash out refi alternatives may make it easier to finance larger expenses.
And it is important to note that there are actually no rules on what the homeowner can and cannot do with the money obtained from cash-out refinance. These extra funds may be used for various purposes, including consolidation of financing deals, home improvements, or any other kind of consumer wants or needs. But it is good advice to spend the money for the home, since the home was actually used to secure.
And there are some costs that are related to cash out refinance. Closing costs are usually around 3 to 5 percent of the total amount of financing being applied for. Fortunately, it is actually possible to roll the closing costs right into the balance of the home financing amount, which means there is no need to pay for the closing costs in advance. However, it should also be noted that rolling the closing costs imply that more interest payments will be required, so that must also be taken into account.
It should also be noted that an application for a cash out refinance may be rejected because of a low credit score, a high debt to income ratio, or doesn’t have sufficient home equity for supporting the amount to be borrowed. Typically a borrower has to have a minimum credit score of 580 to get approved for a refinance. However, every program will have different rules and guidelines.
Moreira Team | MortgageRight has established as their goal of allowing home buyers to buy a home or refinance it in an equitable and transparent way. The process will need to be authentic, without any concern for sales, where the homeowners will actually feel good about the whole procedure because they are assured that their long term life goals and best financial interests are the priority of the company.
People who are looking for the best cash out refinance options can visit the Moreira Team | MortgageRight website, or contact them through the telephone or via email.
SOURCE: Press Advantage [Link]
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