By L. Sampson
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
refinance. Refinancing your home can cost you quite a bit when
you consider higher loan fees and the possibility of points.
you already have a good interest rate on your loan,
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
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
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 isnít the best option.
Protect yourself from scam artists.
There are lenders that practice something called loan
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
losing your house. This particular scam has been played
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: Visit
www.abcloanguide.com/refinance.shtml for a list of
mortgage refinance companies. View our recommended lenders for
low rate mortgage refinancing.