Cash Out Refinance
Choosing a cash-out refinance loan allows you to access the equity in your home and use that money for other needs. It can be a chance to purchase that new car, add an addition on to the home or take a dream vacation. But a cash-out refinance may not be all that it appears on the surface.
When you choose to refinance any loan you will be paying extra money for the new loan. There will be lawyer fees, title fees, an appraisal of the property and likely a survey as well. All of these extra monies can eat into your equity and make a cash-out refinance less valuable.
Before you choose to go the pay of a cash-out refinance you will want to look at the cost of the fees that are included in the refinance. Get your mortgage broker to break down the numbers so that you understand them. Only then should you consider this option.
There are other ways to get the cash that you need without going the route of a cash-out refinance. Choosing an equity loan or an equity line of credit can give you the money you need without the high fees (but the interest rate is usually a little higher than you would get for a cash-out refinance).