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Refinance Your Home Improvement
-- Pushpa Sathish, Staff Writer
Improving your home has a double benefit – you not only add value, you also get to live in better and more comfortable surroundings. No money for improvements? Well, if you’re considering a cash-out home loan, you can shop around for one that comes packaged with a home improvement option.
Again, there’s a twofold advantage here – not only do you get the money to renovate or add to your home, but you may also get a lower interest. That’s because your lender also gets something out of the deal – your equity goes up the moment you improve, adding value to your collateral for the loan. So go ahead, use some of the money for your debt consolidation, and instead of splurging the rest on frivolous expenses, use it wisely to enhance and add value to your most valuable asset.
Estimating Costs in Good Faith
-- By Pushpa Sathish, Staff Writer
Applying for a loan or a refinance on your current mortgage is bound to leave you buried under a mound of paperwork. One important document that you should receive from your lender within three days of your loan application is the GFE or Good Faith Estimate. This paper, which lists the costs that are associated with your loan such as lender origination fees, attorney closing fees, appraisal fees, costs associated with title insurance, taxes, and other related charges.
The document is just an estimate, and the costs listed may vary from the time the paperwork was started to the time the deal is closed. You can get your lender to clarify any discrepancies that arise in the costs actually incurred and those listed in the GFE. Normally, some costs that are constrained by time are bound to change if the time taken to close the deal is a long period.
A GFE lists costs that are related to the closing of the transactions, and does not detail expenses that are incurred and paid for before the application.
Tax Benefits and COR
Let’s say you’re in debt, and the interest you pay is not tax-deductible. In this case, you can refinance your home, and use the extra money to pay off this debt. If it’s your main home, you can get as much as $100,000 more than your mortgage amount, and deduct the interest due even before paying back the loan.
The benefits are twofold – you get rid of a debt with high, non-deductible, interest rates, and also get tax benefits on your home loan repayment. For more details on interest deduction, follow this link.
Selling Your Home to Raise Extra Cash?
-- By Pushpa Sathish, Staff Writer
Low interest rates and low borrowing costs leading to attractive mortgage refinances on one side, rising real estate prices contributing to appealing home sales – which of the two options offers the most benefits?
Refinancing is the better option when the choice of moving away and finding a new home is not as alluring as the money that comes in from the sale of your home. Renting may not be as cheap as you thought, you lose your social and cultural circle, commuting to and from the workplace becomes an added hassle, and finding new accommodation to suit your needs may not be easy. Your increased home equity will provide you with extra cash in hand to renovate your home and add value to it, or to spend as you please.
Selling your home as a way to cash out is a good option when your home value is high, when you retire, or when your kids move away and you no longer need such a large place.
Adjustable Rate Mortgage Refinances
If you are going in for a refinance on your mortgage, check out the adjustable-rate mortgages available. These have the advantage of a very low interest rate for a certain period of time. Once this expires, the rate adjusts to the current market rate.
This option is especially suitable for those who are looking to sell their home and pay off the mortgage. They can use the low interest period to look for a suitable buyer for their home.
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