Thinking about a home renovation, but not sure how to pay for it? Consider a cash out refinance!
A cash out refinance allows you to take advantage of the existing equity in your home to obtain cash. You can do anything you want with the cash, but re-investing that money into a remodel is a great idea.
I recently completed a cash out refinance for Clark and Brianna, specifically for the purposes of remodeling their kitchen. Clark and Brianna had owned their home since 2012 and had already made several improvements to their home, including a beautiful pool and backyard landscaping. Along with obtaining cash for the kitchen update, they also were looking for a better interest rate.
We first did a scenario analysis to see what made the most sense.
- I gathered their current mortgage and Home Equity Line of Credit information
- Clark and Brianna set their goals and priorities
- I compared their current mortgage and HELOC to 3 alternative scenarios:
- Using the $50,000 available from their current HELOC, increasing that loan amount and monthly payment
- Refinancing their current mortgage, HELOC and adding $50,000 cash for the kitchen remodel
- Refinancing their current mortgage, HELOC and adding the maximum amount they could obtain in cash
- We assessed the scenarios against their goals and chose a scenario to move forward with.
Clark and Brianna knew that they did not want to be limited to a set budget for the kitchen remodel, and also wanted additional funds to be available for subsequent projects throughout their home. In the end, scenario 3 met all of their objectives.
Clark and Brianna filled out an application and provided all the necessary documentation for their new mortgage. And my team was able to complete their refinance is only 25 days! The kitchen remodel began about a month later and is still in progress. Clark and Brianna are very excited for the completed kitchen and the additional value they expect from this investment.
All loans subject to credit approval. Rates and fees subject to change. Mortgage financing provided by PrimeLending, a PlainsCapital Company. Equal Housing Lender. © 2016 PrimeLending, a PlainsCapital Company. PrimeLending, a PlainsCapital Company (NMLS: 13649) is a wholly owned subsidiary of a state-chartered bank and is an exempt lender in TX. V010116.