San Diego, CA (PRWEB) October 28, 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. Loan Love is able to provide loan borrowers with the essentials when shopping for any particular loan. One of the loan types that was recently covered in a guide from Loan Love is the cash out refinance loan.
The article explains that while it used to be commonplace for people to strive to pay off their mortgages in full as fast as possible so that they could live in their homes free and clear, the thinking on this has changed quite a bit over the years. Nowadays it can often be more beneficial to continue to pay mortgage payments, thanks to tax laws that allow deductions for mortgage interest. Also, while in the past tapping into home equity was nearly impossible (thus eliminating any incentive to refinance a mortgage if the term was already up) now it is easier than ever with equity loans, lines of credit, and of course, cash out refinances.
So, just what is a cash out refinance? The Loan Love article states: “The concept is actually pretty simple: As you pay off your mortgage – and if your home increases in value, as most homes tend to do in “normal” housing markets – eventually, you’ll have a significant gap between what you owe on your home and what it’s worth; that’s the equity that’s freed up in a cash-out refinance. A cash-out refinance lets you refinance the terms of your loan and place a new and bigger mortgage on it, enabling you to have access to that equity. For instance, 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.”
There are many reasons people usually use cash out refinances to tap into their equity. Some of these reasons may include: college tuition, wedding expenses, medical expenses, purchasing an investment property, starting a new business, or for home renovations (which would increase the home’s equity in the process.) The article ends by saying: “No matter what the reason, that equity is your money. Why keep it locked up in your house? A cash-out refinance means you can access that value and still save money by taking advantage of today’s low rates.”
For the full cash out refinance guide, please visit LoanLove.com.