Here are Top Ways to Cash Out on Your Equity
Homeowners who wish to take advantage of the available equity in their properties have a number of options, the most common ones being the Home Equity Lines of Credit (HELOC) and the cash out refinance. So, which option makes sense between the two?
Factors Influencing your Choice
Various factors will influence your choice for taking advantage of your equity. These include:
• Your level of equity.
• The amount you wish to borrow.
• The repayment period that is ideal for you.
• The term you are looking for.
• The interest rate you are paying on the existing mortgage.
This is a credit line that uses your home as collateral. Most of these loans are adjustable, and you pay in term of interest – only payments. You can withdraw the amount within a specific period, commonly a ten-year period. After this period, you must repay the balance in one lump sum or in installments.
You can only qualify for this line of credit if your DSCR is more than 1.0 and your LTV/CLTV is not more than 80 percent. HELOCs are perfect for borrowing small amounts for short periods on your home equity.
Cash Out Refinance
This is one of the best ways to capture your equity and put it into a single loan. However, most lenders limit the cash out to 80 percent of the loan value. Additionally, you must have a clear purpose as to why you are taking out the cash out; otherwise, you might end up wasting money.
How Can We Help?
At Centex Capital, we understand these two concepts because we have helped hundreds of borrowers take advantage of the equity in their properties. This is why we are the best professionals when it comes to helping you decide which refinance option is the best for you.
Don’t hesitate to give us a call and discuss your options, consultation is free and never a fee. Give us a call at (800)842-2910 or email us HERE.