Question:

What should we know about the cash-out refi mortgage?

Answer:

Firstly, the cash-out refi mortgage is a consolidating loan that can be used to either rid you of a first mortgage and bring you additional cash, or help you get aligned with payments falling behind. Certainly, in the second case you may end up turning short-term obligations into one long term consolidation account used as a lien to your property. You have to be very careful if you decide on a cash-out refi mortgage for this particular purpose.

Secondly, a cash-out refi mortgage is designed to replace your existing first mortgage and not add over it. As such, it will possibly have lower rates than a second mortgage but much higher closing costs, as well.

Thirdly, it is much easier to qualify for a cash-out refi mortgage than for a first mortgage. Hence the temptation to borrow more money than you need. Should you do that? Yes, if you have a smart investment plan. No, if you are going to spend the money on a vacation. Don't forget you'll have to pay back every single dollar borrowed.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Why: Find your next home and save money.
Link: Search thousands of foreclosures. Free 7-day trial.
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 3.1/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage