Use Your Home to Finance Your Home Improvements
We’ve been spending a lot more time at home. It’s made many of us look at our houses in new ways, and see both possibilities and problems. If you are thinking of changes and improvements, you’re probably also looking for a way to pay for them. The answer may be locked in your walls! Home values have been increasing steadily over the last few years, and have gone up dramatically in some areas in just the last year. You may be able to tap the equity in your home with a cashout refinance to pay for your renovations and upgrades.
What is home equity?
Unless you pay cash, when you buy a house, you’ll have a home loan. Your equity is the difference between your home’s value and the amount you owe your lender. Your initial equity is represented by your down payment. If you put twenty percent down, you have twenty percent equity. Equity then grows in two ways. First, every month you pay your mortgage, part of your payment goes to principal and part to interest. The principal payment increases your equity. Second, when your home’s value increases, your equity increases.
In the last year alone, the National Association of REALTORS ® reported that the median sales price of existing single-family homes rose in 99% of the housing markets they surveyed. In 78% of those markets, the increases were in the double digits. Depending on your location and how long you’ve owned your home, you may have significant equity available to you.
A cash-out refinance may be the answer.
When you refinance your mortgage, you replace your current loan with a new one. There are many reasons why people refinance, including lowering their rate, getting a shorter loan term, or consolidating debt. A cash-out refinance is exactly what it sounds like: refinancing to take cash out to use for other purposes. The cash comes from the equity in your home.
Compare and decide.
You may be thinking of using a personal loan or credit card to pay for your home improvements, but interest rates on these types of financing can be much higher than a refinance. Before you make any decisions, talk to a licensed loan originator.
Jana Rosalani
Pascua
Baniaga
Loan Officer
NMLS1770430
M 808.330.7853
E jana.baniaga@myccmortgage.com
CrossCountry Mortgage | 3555 Harding Avenue, #100
Honolulu, HI 96816 | NMLS3029 NMLS1379257
Equal Housing Opportunity. All loans are subject to
underwriting approval. Certain restrictions apply.
Call for details. CrossCountry Mortgage, LLC. NMLS3029
(www.nmlsconsumeraccess.org)
