Using your home equity can be a smart way to finance a remodel, especially as interest rates remain low. As of October 2021, the average 30 Year Fixed refinance loan rate is 3.01 percent APR.
With a cash-out refinance, you refinance your mortgage for more than what you currently owe, replace your current mortgage with a new one and take the difference in cash.
One of the biggest benefits of cash-out refinancing to fund home improvements is that interest rates are typically much lower compared to a personal loan or a credit card.
The benefits of using the equity in your home for home improvement include:
- Tax deduction: The mortgage interest deduction may be available on a cash-out refinance if the money is used to buy, build or substantially improve your home.
- Low interest rates:A mortgage refinance typically offers a lower interest rate than a home equity line of credit, a home equity loan, personal loans, or credit cards..
- Return on investment: Investing in your home is a smart idea, whether you’re looking to sell or create a more comfortable space for you and your family. If you’re considering selling your house, renovations may help it sell more quickly and for more money.
If you are not looking to renovate your home, you are free to use the money from a cash-out refinance for whatever you’d like such as:
Debt consolidation: Using the money from a cash-out refinance to pay off high-interest credit cards could save you thousands of dollars in interest.
Higher credit score: Paying off your credit cards in full with a cash-out refinance can build your credit score by reducing your credit utilization ratio, the amount of available credit you’re using.
Take advantage now and contact me today to find the best program that fits your needs.
Posted October 31, 2021
by Treeium Inc..