| There's no doubt you have been inundated via e-mail, | | | | economic goals? How long do you plan to be in your |
| postal mail or even phone calls from lenders trying to | | | | house? Secondly, are you getting the best deal? What |
| convince you to cash out the equity in your home. The | | | | are the fees associated with initiating the loan and |
| reasons for a cash out refinance are endless--debt | | | | what will your monthly payment be? Most origination |
| consolidation, better rate/term, lower monthly payment, | | | | fees are "rolled into" the loan, meaning they will be |
| home improvements, college education financing, etc. | | | | subtracted from the total loan amount after paying off |
| One commonly overlooked reason to cash out equity | | | | your other mortgage(s) and debts. |
| in your home is that you may possibly find that $10,000 | | | | Many lenders see cash out refinances as a slightly |
| could earn you more money if it's invested wisely. | | | | higher risk than a rate/term refinance mortgage and |
| Don't forget that mortgage interest is tax-deductible | | | | may adjust the rate accordingly, so find out what that |
| (up to 100% of the value of your home). You can even | | | | premium is costing you. Also keep in mind that when |
| now pull 125% of the equity/value of your home with | | | | you originate a new loan, you are starting with an |
| average and better credit (usually a FICO score of | | | | entirely new term. If you've been paying on a 30-year |
| 640+). | | | | mortgage for a few years, you may be beginning |
| The most important thing to think about in pursuing a | | | | another 30-year mortgage. See if a shorter term (e.g. |
| cash out refinance is what you will do with the cash | | | | 15-20 years) is affordable for you. |
| you're getting. What are your short and long-term | | | | |