Home prices have been on a tear lately, rising 18% in just the last year. It has homeowners sitting on unprecedented amounts of equity — about $8.1 trillion of it, in fact. According to Black Knight, the average homeowner gained 11% in tappable equity during just the first quarter of this year.
The FHA streamline refinance is not right for everyone, but if rates significantly dropped or you can afford a fixed-rate loan and want out of an ARM, it can make sense. If you’ll stay in the home for the foreseeable future, you can either save money on interest or have a more predictable payment.
There seems to be a common misconception out there from financial gurus that refinancing your home, under any circumstance, is a bad idea. However, what these TV “talking heads” fail to realize is, that is just not practical.
Although you may find yourself overwhelmed by unpaid bills, if you own a home, you are one step closer to debt relief. Your home is your best investment, which you can use to get you and your family in the black financially after medical bills, credit card bills or unforeseen expenses leave you scrambling for available cash. It’s never too late to refinance your mortgage. Here are a few tips for getting the timing right.
One popular way to reduce debts that carry high-interest rates — like credit cards — is to use your existing real estate investments to your benefit with a cash-out refinance. This type of loan involves refinancing an existing mortgage, with the new mortgage being greater than the original one in order to provide the borrower with the extra funds they need to pay other bills or reduce other debts. This process can actually improve credit scores if you pay off maxed-out credit cards with your refi. And you may even be able to deduct the mortgage interest from your taxes! To get started, learn about the requirements for this type of loan: