Do you need more information on how to refinance your mortgage? If so, our refinance guide is just what you’re looking for. It’s packed with tips, tricks, and tactics on how to refinance the right way.
Call us right away at our toll-free number (805) 434-5226 to reach one of our home loan experts.
*Disclaimer: If you refinance an existing mortgage, the total charges could become higher over the life of your loan.
HELOCs, or home equity lines of credit (home equity loans) are usually second mortgages. The idea is that, in addition to the main mortgage you have on your home, you’ll take out a second loan.
This makes the home equity line of credit a second lien on your property.
Important: a cash-out refinance is a new first mortgage, not a second loan, and therein lies the difference. HELOCs can be seen as riskier since you’re taking on an additional loan.
Your home equity is the (appraised) value of your house, minus the amount you owe.
If you have more home equity, you’ll get more money from a cash-out refinance. Many homeowners like you take money out to pay off debts with high interests (such as credit card debts) or to make much-needed home improvements.
You can get the accurate cash-out amount by subtracting the balance of your old home loan from the amount of your new mortgage.*
*Certain other factors, such as the type of loan you get, applicable fees, and your equity, can affect the final amount.
The fees required for getting a new mortgage can often be added to the overall refinance amount to avoid paying out of pocket at the closing.
Keep in mind that refinancing to get cash out could result in a higher rate or a longer loan term, which could lead to paying more in interest long-term.
P.S. Take action! Talk to one of our Home Loan Experts by calling (805) 434-5226 to learn how you can use your home equity to your advantage.
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