Monday, November 25, 2013 - Article by: Prospect Financial Group, Inc. -
If you have built equity in your home and you meet the other refinance qualification requirements, you have the ability to complete a cash out refinance. A cash out refinance loan enables you to borrow against the equity you have built in your home in exchange for cash, which can be used for essentially anything you like. However, you will be paying it back along with your mortgage payments, so it is best to make a wise investment with that cash.
Some of the most popular uses for cash out refinances include to pay off debt, to make home improvements, to pay for a child's college education, to build up savings accounts or to purchase another property. Homeowners with additional credit card debt often choose to complete a cash out refinance in order to pay off that debt. The interest rate you pay on your mortgage is often much lower than the interest rate you pay on a credit card. Furthermore, the interest rate you pay on your mortgage is tax deductable.
If you need to repair your roof, remodel your bathroom or kitchen or even want to add in a pool, a cash out refinance loan is a great option for you. A cash out refinance can be an especially great investment if you put the funds you receive towards an improvement that will increase your resell value.
Homeowners also often choose to tap into their equity in order to come up with the money needed to pay for their child's college education. College is not by any means cheap and student loans can come at a high interest rate.
Homeowners also often choose to us the money they get from a cash out refinance loan to build up their emergency savings account. Setting aside emergency funds can help you in the future if you happen to lose your job or you become sick and cannot work. These emergency funds can be the different between keeping and loosing your home.
Finally, another popular option for a cash out refinance loan is to purchase another property. Especially in today's market, where home prices and interest rates are increasing, purchasing a second home is a great investment. Homeowners are also using the funds to purchase investment properties, which will enable them to make a monthly income and potentially even live debt free.
To get more information about how to complete a cash out refinance, call Prospect Financial Group, Inc. today at 858-605-0952.
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