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3 Things To Watch Out For With A Cash Out Refinance Mortgage Loan
A cash out refinance mortgage loan is a great option if you have accrued a lot of equity in your home. If you owe $75,000 on a home that is worth
$125,000, you could refinance the amount you owe and take up to $50,000 in a cash loan against the equity in your house. The money can be used to
consolidate debts, do a remodeling project, or even invest. As great as a cash out refinance can be, there are a few things to think about before
you decide to take out this type of loan.
How high are the fees to refinance?
Taking out a home equity loan usually costs less in fees than a refinance. Refinancing your home can cost you quite a bit when you consider
higher loan fees and the possibility of points. If you already have a good interest rate on your loan, refinancing so that you can get a cash out
option, might mean paying a higher interest rate on a new loan. In that situation, you might want to consider taking out a home equity loan
instead of a cash out refinance mortgage loan.
How fast do you need the money?
When you take out a home equity loan, it takes less time to see your money. Often, it only takes 5 days to close. Cash out refinance mortgage
loans can take a lot longer, so if you need the money immediately, it probably isnt the best option.
Protect yourself from scam artists.
There are lenders that practice something called loan flipping. They convince you to refinance your house, taking out a bit of equity for a
project or two. A few months later they approach you to refinance again, convincing you to take out more cash from the equity in your house.
Their scheme is to keep having you refinance, tacking on large fees and possibly increasing your interest rate until you are so far in debt that
you end up losing your house. This particular scam has been played against many elderly homeowners with devastating results.
Taking cash against the equity in your house can be a wise move, but always compare taking a cash out refinance mortgage loan against the option
of taking out a home equity loan and choose the plan that is best for you.
About the Author
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Visit http://www.abcloanguide.com/refinance.shtml for a list of mortgage refinance
companies. View our recommended lenders for low rate mortgage refinancing.
More Useful Resource and Updates on portland home loan refinance
- Economy - Wednesday (Investor's Business Daily via Yahoo! Finance)
Mortgage applications dive. The Mortgage Bankers Association's index slid 20.3% to 379.9 in the week ended Oct. 31, the weakest reading since Dec....
- (AFX UK Focus) 2008-11-05 12:15 US mortgage applications slump, costs increase-MBA (Interactive Investor)
NEW YORK, Nov 5 (Reuters) - U.S. mortgage application demand skidded last week, driven by a nearly 30 percent slump in demand to refinance home loans as borrowing costs rose, a trade group said on Wednesday. The Mortgage Bankers Association's seasonally adjusted mortgage applications index, which includes both purchase and refinance loans, slid 20.3 percent to 379.9 in the week ended Oct. 31. ...
- Economy - Wednesday (Investor's Business Daily via Yahoo! News)
The Mortgage Bankers Association's index slid 20.3% to 379.9 in the week ended Oct. 31, the weakest reading since Dec. '00. Applications for loans to buy a home sank 13.9%, also to a near-8-year low. Refinancing demand fell 27.8%. The 30-year fixed-rate mortgage rose to 6.47% from 6.26% in the prior week. The 15-year fixed-rate mortgage rose 13 basis points to 6.14%. One-year ARMs fell 4 ticks ...
- Bush Administration Works Toward Foreclosure Prevention Plan (Fox News)
Sources close to the policy process tell Fox Business that the Bush Administration is considering improvements in the Federal Housing Administration?s ?Hope for Homeowners? program, to make participation more attractive to banks, thrifts and other mortgage holders.
- US mortgage applications slump to 8-yr low (The Economic Times)
US mortgage application demand skidded last week to an eight-year low, driven by a nearly 30 per cent slump in demand to refinance home loans as borrowing costs rose.
- Keep Refinancing in the Family (Washington Post)
Q: I am looking into refinancing my adjustable-rate mortgage to a fixed rate. During this process, my mother told me that she would lend me the $150,000 to pay off my existing loan and that I could pay her back at the current market rate for a 30-year fixed mortgage. This would provide her a stable investment and I could forego the closing costs, paperwork, appraisal, etc., associated with ...
- Rising Mortgage Firm Is At Home In Tampa (The Tampa Tribune)
There's at least one mortgage company that still sees opportunity in the real estate market.
- Deteriorating Home Market Puts GMAC Unit at Risk (New York Times)
GMAC, the finance company partly owned by General Motors, lost $2.52 billion in the quarter, hurt by the housing slump and vehicle lease write-downs, and said that its mortgage unit may not survive.
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