My wife and I had talked about refinancing our house right as it was time to start thinking about the arrival of our new baby. Our house would eventually need more in the way of space for our new family member, and there would also be the added investment that goes into every child. It’s never too soon to start building for the future; college funds, video games, clothing, school. We talked to Real Estate Yogi on two different occasions in the same month about our converging prospects. During discussions of our household with the new baby our representative suggested that we kill two birds with one stone with cash out refinance mortgage loan.
Home Equity and Refinancing
The Real Estate Yogi Representative asked us about the equity on our house and our credit and we were pretty sure that both were pretty healthy. People can use the equity on their house, or the value minus the amount owed, and put the house up as collateral or credit against the debt toward a loan. They can do this through a home equity loan, home equity line of credit, or cash out refinancing loan. We were looking to remodel and start a fund for our child, as well as refinance our mortgage for lower monthly payments. Our Real Estate Yogi Representative suggested that the cash out refinance mortgage option would help the most because of the concurring need for both.
Differences between Home Equity Loan and Cash Refinance
My wife and I did not know about any of these, so the representative explained everything simply and in detail, with scenario descriptions. A home equity loan is a loan enabled by the equity of the house. They are usually used specifically for expenses like remodeling, auto finance, and college, separate and additional to the first mortgage. The lender is protected from the risk of default by guarantee of repossession of the house. Cash out refinancing encompasses both mortgage and the purpose that home equity loans serve. We were told our equity figure and decided on an amount to take out. With the cash out, the house acts as kind of like a personal savings stash or piggy bank. Cash out refinancing is usually meant for longer terms (that cover the remainder of the mortgage) than home equity loans. We were less than halfway into our mortgage, and although home equity loans are sometimes used for mortgages, we were set on refinancing our mortgage completely.
Benefits of Cash out Loan Refinancing
Cash out refinance rates are typically lower than home equity loans or line of credit. We would benefit from the savings on top of our equity cash out, both towards the remodeling project and our new baby fund. Our significant equity meant that reductions wouldn’t hurt us. Another benefit was the reduced number of monthly payments. All it requires is one payment for both loan and mortgage instead of multiple.
We were connected to a lender through www.Real-Estate-Yogi.com and made an educated loan selection with their advice. Check out Real-Estate-Yogi.com for further support on your home refinance. They will have access to lenders across your area and beyond. Call 1-800-987-1397 for a free consultation.