Are you in urgent need of cash? Then, you have come to the right place. As a homeowner you enjoy lots of great benefits that come with owning a house. But did you know that you can tap into the equity of your house with cash out refinance in Texas. This allows you to excess a large sum of cash in a periodic manner. If you are a homeowner in Texas, who responsibly makes monthly payments, then you can take advantage of this financial tool to fulfill your dreams. Whatever your goals are with the help of cash-out refinance, you can now easily achieve them. Whether you want to consolidate a large debt or simply want to renovate your property, you can do that without a worry.
Let’s take a closer look what exactly is cash out refinance in Texas, it’s determining factors and if it is the right choice for you.
What exactly is Cash Out Refinance?
Cash out refinance allows you as the homeowner to replace your current mortgage with a new one that tends to offer lower interest rates and better loan terms. The difference between the new mortgage and your previous one is what you will be given in hand. This sum you receive can be used in a variety of ways such as:
- To pay off the original mortgage.
- To renovate your property or to make an addition to the house such as a new room or kitchen.
- To pay off student loans.
- For medical emergencies
- To consolidate any other standing loans.
If you send the money on the house, you might be eligible for tax deductions. Therefore, you should consult your financial advisor on check your eligibility.
Refinance Your Home’s Value:
Cash out refinance in Texas offers you a golden route to taking advantage of your home’s value. In the state of Texas, when you apply for cash out refinance you will receive 80% of its value. Your home because a powerful financial tool that can help you out when you are strapped for cash. All you have to do is make timely repayments on the mortgage and you reap the benefits of cash out refinance. You will be eligible to apply for cash out refinance if you’ve had your original mortgage for more than six months.
Cash out refinance with Favorable Interest Rates:
Thanks to the Federal Rate Cuts last week, mortgage interest rates are dropping. We have already seen a 6% decline in 30-year mortgage rate this month. Experts have predicted that by December 2024, we might see mortgage rate drop to further 4% which will go on to lessen to 3% in January 2024. This is prompting a favorable refinancing environment. Many lenders are predicting a spike in refinancing now. By refinancing you can lower your monthly repayments, reduce the total interest you will have to pay and have a better grip on your financial situation. If you decide to refinance right now, you can gain access to better loan terms, monthly savings while accessing funds which can be used to improve your living standard. You can get professional appraisal at Dream Home Mortgage.
What is Loan-to-Value (LTV) Ratio?
One of the key factors that needs to be assessed when opting for cash out refinance in Texas. Typically, it is a rule of thumb that a good Loan-to-Value (LTV) Ratio should not exceed more than 80% of the property’s value. If you go for a higher Loan-to-Value (LTV) Ratio, then you might face problems such as getting a private mortgage insurance (PMI) higher borrowing costs or you will simply be denied to apply for a loan. Any LTVs above 95% are unacceptable in majority of the U.S. states especially Texas to protect borrowers.
Get a Professional Evaluation of Your House:
Getting cash out refinance is like unlocking your home’s piggy bank. Before you even entertain the thought of refinancing, it is always a good idea to get an expert’s opinion. The home’s equity is the difference between its estimated market value and the remaining sum to pay on the mortgage. The more equity you develop in your house by making regular monthly repayments, the more cash you will get in return. With the help of cash out refinance, you can now tap that equity to utilize it in a number of ways.
Is Cash Out Refinance in Texas a Right Fit for You?
Cash out refinance is a great financial tool for responsible borrowers. As it allows them to access their house’s equity. But one thing you that you must keep in mind when applying for cash out refinance in Texas is that you will be keeping your house as collateral for the new loan. If you miss to repay the original amount with interest or forget to make timely repayments, you risk the threat of foreclosure. But don’t worry with Dream Home Mortgage; you won’t have to worry about this. Under the able stewardship of Mr. Hussein Panjwani, thousands of homeowners across the 50 states of America have accessed their house’s equity to achieve financial freedom. So, what are you waiting for? Book a 30-minute free consultation to unlock financial freedom!
