As a result of refinancing, your total finance charges may be higher over the life of the loan.
Invest Your Equity
Life is full of investment opportunities. Why not use the accrued equity in your home to finance them? If you are looking for ways to capitalize on the equity in your home, it may be useful to consider these investment opportunities. Tapping into the value of your home should be done with caution but we have seen it open up financial avenues for our clients.
The majority of cash-out refinances that we do at Nations Lending capture equity held in the home, consolidate debts and hopefully lower interest rates. Occasionally borrowers who wish to purchase investment homes, pay for their kid’s college education, or subsidize retirement plans will withdraw equity from their homes as well.
A home equity loan will allow you to borrow a large sum with the obligation of paying it back. A home equity line of credit (HELOC) is a revolving credit line using your home as collateral. These two financing options could allow you to own an investment property, if you want to own a rental home for ongoing cash flow, or for renovation projects on your existing home. The equity in your house could also be used for investing in other wealth-building activities or putting money towards college-bound children.
Another option to consider when tapping into your homes equity is a Reverse Mortgage, for eligible borrowers over 62 years old. With a Reverse Mortgage, you receive monthly payments from the lender, which could allow you to retire earlier or purchase a new home.
Home improvements can help add value to a home. If you are looking to renovate your house, it’s important to consider enhancements that will increase the overall value of the home but also attract potential buyers. Remodeling a home does not have to be expensive and can encompass a small project or a large renovation. In the ever changing real estate market some of the most common home improvements projects that have a higher return on value include remodeling a bathroom, upgrading the kitchen, or more cosmetic improvements like updating windows or outdoor appearance.
There are lending options offered by Nations Lending that give you the opportunity to remodel your home such as a home equity line of credit (HELOC), cash-out refinance or an FHA 203k loan. One of the best ways to utilize built up equity may be by renovating your existing home. By adding more bedrooms and bathrooms, front lawns or pools, homeowners are capable of adding tremendous value to their home. Of course all this should follow a well thought out financial model. It's important to keep in mind that while these projects may be intended to add value to your home, significant increases in equity may not be evident but that should not dissuade you from creating your desired home.