San Diego, CA (PRWEB) October 13, 2013
LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. In order to help borrowers find the best loans for their situations, the website is continuously updated with new materials that can help them understand the options that are available to them. Recently, the loan advice website posted an article that explains more about the cash out refi loan, and why it is an attractive choice for many homeowners nowadays.
The Loan Love article explains: “It used to be that one of the goals of homeownership was to eventually pay off your home loans and live in your house mortgage-free. Sucker! Nah, just kidding. But it is true that in the past couple of decades, that kind of mindset has kind of gone by the wayside for a lot of people. Why? Well, for one thing, tax laws that let you deduct your mortgage interest are a big plus for a lot of homeowners: Pay off your mortgage and you lose one of the biggest tax advantages available to the average (i.e., not super-rich) person. Also, while your parents or grandparents may have had a difficult time accessing any equity they’d built up in their home over time, many lenders today have made it easy to tap into that equity with equity loans, lines of credit and the ever-popular cash-out refinance.”
The article explains that a cash out refinance allows the home owner to access the equity that they have built in their homes. Under normal circumstance, a homes value will continue to increase even as the owner is paying off their mortgage payments. Eventually, there will be a significant gap between what the borrower still owes on the house and what the house is actually worth. This difference is the “equity” that can be freed up through a cash out refi. The article explains:
“… say you have a mortgage of $150,000 remaining on your home. Over time, the value of your home has increased to $250,000. That $100,000 difference is the equity you have in your home, and thanks to the cash-out refinance, it could be burning a hole in your pocket in just a few weeks. Of course, you typically can’t access the entire amount of your equity. Usually, you’re limited to a loan-to-value (LTV) ratio of about 80%, although some lenders may allow 90% LTVs (generally with a significantly higher interest rate as well as points – and you’ll also have to pay private mortgage insurance).
There are lots of reasons to cash out:
- Pay for college tuition for your kids or yourself
- Afford that wedding of your dreams – or your child’s dreams
- Get those renovations done on your home – and increase your equity all over again in the process
- Buy an investment property
- Start a new business and thumb your nose at your corporate gig”
For more information on how to benefit from a cash out refinance, please visit LoanLove.com for the full cash our refi guide.