9 Million Homeowners Could Save with a Refinance
Posted On February 25, 2020
On the fence about a refinance? Black Knight Analytics reports about 9.4 million homeowners with a mortgage could save an average of $272 per month if they refinanced their mortgage with today’s low mortgage rates. At the end of January, the Federal Open Market Committee (FOMC) voted to hold interest rates steady and mortgage rates reacted by trending downward. A mortgage refinance is an opportunity to lower your monthly mortgage payment, change your loan terms, or even get cash out.
What is a cash-out refinance?
A cash-out refinance is a new loan origination, where you take on a larger mortgage loan, and withdraw the difference between that loan amount and your existing mortgage. You will still have to pay closing costs just like any other type of refinance. Most financial professionals recommend you wait to do a cash-out refinance until you’ve built up at least 20% equity cushion. Your home equity is equal to the amount you still owe on your mortgage and the current market value of your home.
When should you consider a cash-out refinance?
Real estate professionals estimate that US homeowners have a collective $6 trillion in tappable home equity, or the home equity value above the 20% equity cushion. In Q1 of 2019, just $54 billion was withdrawn. If you have any questions about a cash-out refinance, or just refinancing to lower your monthly mortgage payment, let us know.