How a Higher Mortgage Rate Could Save You Money

Is it worth giving up that low rate you got back in 2020 or 2021? It just might be!

Earlier this year I published an article sharing why you may want to consider giving up your current mortgage’s low rate for a cash-out refinance so you can lower your overall monthly payments.?

If you keep up with national news, you know many of us are taking on more credit card debt. As the minimum payment on credit cards increases, we begin looking for ways to increase cash flow and decrease debt.?

To help you navigate another option, let’s take another look at getting into a cash-out refinance.

Looking at the Big Picture

Sure, it may sting for a minute to give up that low rate you got a few years back but don’t get stuck there. Instead, take a look at your complete financial situation and monthly cash flow.?

Ask yourself -?

• What would I do with an extra $500-$1,000 monthly cash flow increase??
• How much LESS stressful would it be to have ONE monthly payment instead of 5 or 6??

Why NOW may be the Right Time for a Cash Out Refinance

1. High-Interest Debt?

If you’re paying high-interest debt each month, a cash-out refinance may allow you to pay it off at much lower rates. With credit card rates averaging 14-28% interest, you could easily cut your wasted spend (money paid on interest) in half.?

2. Debt Consolidation

If you want to lower your monthly expenses and reduce the number of bills you have to pay, a cash-out refinance may be the perfect option. For example, if you have multiple credit cards and loans (auto, unsecured) at higher interest rates, you can use your equity and consolidate all your debt into a new fixed-rate mortgage.

I’ve helped some homeowners save over $1000 a month!

3. Upcoming Expenses

There’s always something big coming up! Home improvements, college tuition, reserve funds… and on and on. Some may be more urgent than others and it’s those things you may need to consider when deciding if a cash-out refinance is right for you.?

Get 80-100% Cash Out on the Market Value of Your Home

For the general public, most cash-out refinance programs allow you to borrow a generous 80% of the market value of your home.

Sounds great, right??

However, it gets even better if you’re active-duty military or a veteran. In this case, you may be able to utilize up to 100% of the market value of your home using your VA benefits. You then can turn around and do whatever you please with the cash.

But wait, it gets even better. If interest rates drop 6 months after you close, the VA has a streamlined refinance that may not require an appraisal or income verification.?

You read that right. NO appraisal. NO documents.

Perks of a Cash Out Refinance

Many perks are highly individualized to your specific situation. However, in general here are a few to consider -?

Improve Your Credit

By doing a cash-out refinance and using the funds to pay off debt, you could lower your credit utilization (how much you’ve borrowed in relation to what’s available to you). As you may already know, this is a critical factor in your score. As your credit utilization goes down, most often, your credit score will increase.

Tax Deductions

If you plan to use the funds for home improvements and the project meets IRS eligibility

requirements, you could take advantage of the interest deduction at tax time. Consult your tax advisor regarding the deductibility of interest and charges under the plan.?

Situational Perks

Everyone’s situation is different. The best way to find out if a cash-out refinance makes the most financial sense for you and your family is to contact a trusted mortgage professional.??

Please call, DM, e-mail, text, or just click on the link below for more information or with any questions.

https://lenderlogix.com/mycard/[email protected]