When homeowners secure a cash-out refinance, their mortgage is replaced with a new loan with an amount higher than the current loan balance. The homeowner can then withdraw the difference of the two loans as cash.
Over the course of the last few months, some people are considering taking cash out of their home’s equity to help with paying bills or offsetting lack of employment. Is now a good time to be doing this?
In some cases, the answer is yes. Generally, continuing to pay bills and maintaining your credit score is always a good idea. However, it could lead to problems down the road as refinancing to pull cash out will be putting their home equity on the line. A change in income in the future without savings to fill the gap could lead to missed payments, eventually leading to the bank foreclosing on their home.
There are many aspects to a cash-out refinance. If you have questions about the process, or need help determining if this is right for you and your family, feel free to reach out to Scott Bennett at 503-703-4699 or firstname.lastname@example.org to talk about your current situation.