After a year of staying locked in, by now most homeowners have entertained the idea of a renovation project in their house. If you are considering tapping into your home for cash, you may be surprised at how much equity is available. Homes have skyrocketed in value over the past year and roughly 46 million homeowners hold a total of $7.3 trillion equity that is available to tap. This amount is the largest number ever recorded (according to Mortgage Knight). Are you one of the many who are not taking advantage of this opportunity?
USE YOUR EXISTING MORTGAGE
Before a HELOC (Home Equity Line Of Credit) made the most sense for home additions but now that mortgage rates are at historic lows it is time to tap into your existing mortgage to help finance your home renovation projects. With interest rates so low, take advantage of a cash-out refinance today. Refinance rates are lower than a home equity loan and the current rates could be quite lower than your existing mortgage rate. A situation like this only comes once in a blue moon! You are essentially taking out a bigger mortgage, but lowering the interest payment at the same time.
TAKE ACTION NOW
These low rates will not last long and homeowners who haven't tapped into their equity are missing the opportunity to lower their monthly payments. If you haven't been looking at interest rates the past year, now would be the time to start paying attention. In fact, the federal government will be launching a new refinancing program aimed at homeowners who haven't taken advantage of these historically low-interest rates.
Keep in mind that there are some limitations for cash-out refinances and we advise that when you budget for your refinance that you keep at least 20% equity in your home in case house values fall. As a reminder, these record low-interest rates could be short-lived. Sadly nothing lasts forever. At Atlantis Mortgage we advise that you add some urgency to getting a refinancing completed sooner rather than later. The facts are that the economy is heating up and that usually produces higher mortgage rates.