Overall one typically cashes out to pay off other debts and consolidate them for monthly savings. Some people just want to have extra cash to do remodeling projects or to take a dream vacation. The reasons for cashing our on your home are as varied as the families that take out the loans!
One school of thought is that the equity in your home does nothing for you while it sits there. Especially in today's declining real estate market. The average depreciation on home values this year has been 13% nationwide. That is money lost to those with equity in their homes! Consider that by taking out as much cash as possible and investing it into money making ventures such as stocks, other business ventures, other real estate, etc … one can actually use the equity as a means of making more money.
The cost of taking the money must be weighed by the ability to pay it off and make a profit with the monies taken against the mortgage of the house. We have seen calculations that show by cashing out equity in your home and using those funds to make more money you can cut as much as 15 years off of the life of the loan. It requires a good game plan and a very strict hand to accomplish this, but for many this concept can be the key to a future of self employment and early retirement.
For others owning the home is the primary concern. They want to pay off the house as early as possible just for the pride of knowing they own their home and don't have to share ownership with a bank or lender. The above mentioned methods are one way to accomplish this in record time. If you lack the knowledge or willpower required to do that then perhaps a cash out refinance is not for you.
The number one reason for doing a cash out refinance is to save money monthly by paying off other debts. Cashing out and paying of car loans, credit cards, student loans, medical debts, and other bills not only saves money monthly but it also builds your credit score. The key to saving money is to ensure that you get the lowest rate possible on your new loan. It is important to work with a reputable company that can acquire the lowest rates possible on your new loan. For many families in the US doing a cash out refinance frees up monthly expenses and allows them to finally be debt free and save money monthly for a rainy day.
One cannot stress enough the predicament we are in with our housing market in the US With equity disappearing faster than most could have ever predicted it is vitally important to act quickly if you are considering a cash out refinance in Florida. Our market is declining at a rate far quicker than the national average. Some areas of Florida are seeing values declined at a rate of 3% monthly. Don't leave equity on the table if you have been thinking of doing a refinance NOW is the time.