Does Taking Cash Out of My House Make Any Sense Right Now?

Filed under: Mortgage Refinancing

Should you take cash out of your house? Does it make any sense right now?

Cash-out refinances are generally a case-by-case basis. Recently, we helped someone who built a bunch of debt (revolving and other things). They had backed themselves into a corner and could see that they needed to make changes.

What we were able to do is refinance the home to take advantage of the equity that was available. Who knows if the real estate prices are going to drop – but we know where the values are at right now. Anyone who has owned their homes for more than a few years, then it means that they have built up some equity.

For people who might have debt and might need a little more cash to sit on the sidelines, it might be a good option. With this example I’m giving, they were able to consolidate a large chunk of their debt into the mortgage. Their rate increased by at least a few % points, but we still saved them well-over a $1000 on a monthly basis.

It’s not an ideal situation, but saving $1000 per month is a huge deal. All they did was take advantage of the option that was there.

Should You Increase Your Interest Rate with a Refinance?

Ideally, we don’t like to put someone in a place where they are increasing their interest rate. But sometimes it makes financial sense.

We don’t know what is going to happen in the economy. Are we heading to a deeper recession where people might start having a hard time financially? Sometimes it makes sense to make the hard decision to get yourself back above water, then you can push forward from there.

I’m throwing this idea out there this week with the disclaimer that a cash-out refinance isn’t for everyone. But we can always run the numbers and see what makes sense for your individual situation. If the cash flow improvement is worth the refinance, then let’s do it! Most people are thinking that we’ll have lower interest rates in the future again, then there might be an opportunity to refinance to a better rate in the down the road (and save even more money).

If this is a situation you are in, then I would love to help you out. No judgement whatsoever. Here at Franklin Loan Center, we are interested in helping you find the best financial solutions that work for your needs.

Franklin Loan Center | NMLS 237653
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