As COVID-19 continues to upend the economy, countless people are looking for ways to put money in their pockets.
The good news is that homeowners have an advantage—a cash-out refinance can help increase the cash they have on hand.
That sounds great, but is cash-out refinancing right for you? Read on for a quick overview of the benefits and things to consider.
How it works
When you do a cash-out refinance, you are essentially applying for a new loan so you can tap into your equity for cash, which can be spent at your discretion.
BENEFITS OF CASH-OUT REFINANCING
Money in your pocket: You can use the money any way you please: to pay down debt, take care of bills, or invest and save for the future.
Lower interest rates: Favorable rates may bring down your monthly payment.
Roll closing costs into your loan: While the processing of any loan incurs closing costs, you can roll them into your new loan or pay them outright—whichever works better for you.
Flexible options: While the new loan balance might be higher, you can minimize that increase by accepting less than the maximum cash-out value.
THINGS TO CONSIDER
Higher loan balance: Depending on how much cash you choose to access, the new loan might have a higher balance than the original loan, which can increase your monthly payment.
Closing costs: Every purchase or refinance will incur closing costs, so you’ll want to make sure to factor those into your decision.
Cash-out refinancing can be incredibly helpful for homeowners, especially given the financial concerns many are experiencing due to the pandemic. To see how all the factors play out for you, talk to a trusted mortgage professional to help determine the best path forward.
Wintrust Mortgage loan experts can help you explore your options and find the right solution for your financial needs. Start the conversation today!