In the past few years, millions of Americans have refinanced their mortgages and cashed out the equity in their homes, but is refinance right for you?
If you are thinking about refinance, first consider the implications on your monthly payment. In all but the rarest of circumstances, you probably should not refinance unless doing so lowers your interest rate. If you are able to manage a higher monthly payment, make sure you have a plan for your cashed-out equity that justifies the greater expense.
Property values have been skyrocketing for the past several years, but there now are indications of a cooling housing market. Has the equity in your home been built up through rapid appreciation, or has it come through diligently paying down your mortgage? The latter case is much less risky.
The biggest potential risks involved with cashing out your equity are higher costs of maintaining your loan, a weakening housing market, and depreciating value of your home. You definitely do not want a $350,000 mortgage on a home that is worth $275,000.
If you want to refinance, have a plan for your cashed-out equity. Paying off higher interest debt is one good idea, as is investing the money in property that promises a higher return than your refinanced interest rate. As long as you are aware of the risks involved, your cashed-out home equity can be used in any manner you would like, and definitely can work in your favor.
DIY debt consolidation: 3 secrets for success
You're sinking fast in credit card debt, and there's not a life preserver in sight. Loans and balance transfer offers involve applying for more credit. Follow these tips for rescuing yourself from the dangers of excess debt.
Reducing debt or building savings?Even if you are following a debt reduction plan, it is important to try and build emergency savings.
When debt help is not enough: 3 reasons for filing bankruptcySituations can arise that make paying your bills impossible, or that render you ineligible for participating in debt relief efforts such as credit counseling. When you're enduring any of these circumstances, consulting a bankruptcy attorney can provide information about your rights and the consequences of filing bankruptcy.
Personal spending rises as income slipsPersonal income declined in August, but personal consumption expenditures rose, according to the Bureau of Economic Analysis.
3 reasons for consolidating credit card debtAre you paying more than one credit card bill each month? Have you overlooked a bill and incurred penalty interest rates or late charges? Consider credit card debt consolidation for simplifying debt management chores.
Guide to No Cosigner Student Loans
Are you a would-be student who would like to attend college, graduate school, or professional school, but are hesitant because you…
The advantages of using your local credit union to refinance your mortgageLocal credit unions increasingly are popular alternatives to traditional banks. While banks are privately owned,…
Debt Consolidation for Senior CitizensFew people have more financial choices, yet more opportunities to be overwhelmed by those choices, than senior citizens. Seniors…
What is the Best Loan and Debt Repayment Program?Incurring debt sometimes is necessary in order to meet one’s financial and personal goals, or to make payments for necessary…
Bad Credit Student Loans for High Risk StudentsCollege costs nowadays are through the roof and are only expected to rise in the future. Most students and/or their parents…