1. Pay off debt
You could pay off credit card debt and end up paying less in interest. By paying off the credit cards with equity from the home, you are shifting the debt into your mortgage. Credit cards often are at higher interest rates, and if you only make the minimum payments on the credit cards, you’ll likely be in a better position by paying them off through the mortgage. You will also likely improve your credit scores by paying off (or down) credit card debts.
2. Pay for a wedding
Your daughter wants a $50,000 wedding, and you don’t have the cash, but you have the equity in your home? First, make sure her fiancé is a keeper. Then, call Nextview Loans, and we can facilitate a cash out refinance for you.
3. Pay for kid’s college
College is getting ridiculously expensive. If you didn’t set up a 529 Plan, you might be scrambling. The equity in your home could be a place to turn.
4. Pay for funeral expenses
If you or a loved one passes from this terrestrial plane without life insurance, you don’t want to be selling car washes in the corner parking lot to pay for funeral and burial expenses if you have equity in your home.
5. Complete home improvement projects
Do you have some great ideas for how to make your home look better? Whether it’s a deck, gazebo, replace the sagging fence, build a shed, remodel the kitchen, or make the lawn drought-friendly, the equity in your home is a cheap way to finance home improvement.
6. Fund a down payment on an investment property
Are rents skyrocketing in your area, and you’re wondering if you could get in on the action as a landlord? Use that home equity for the down payment and start pulling in those rents.
7. Fund a 529 college savings plan
The interest you earn in the 529 Plan will almost certainly outpace the interest paid on the increased debt with a cash-out refinance. Have a mortgage consultant from Nextview Loans run the numbers for you.
8. Pay off the second mortgage or get out of an adjustable mortgage
Would you rather your home equity line of credit be lumped into your first mortgage, especially if the payment is scheduled to increase? Do the smart thing and consolidate your mortgage debt into one lower overall payment.
9. Get cash out while lowering your payment, rate, term, or dropping mortgage insurance
There are a few financial reasons to refinance: you could drop your payment by reducing the rate or increasing the term, or perhaps your goal is to reduce the term to reduce interest paid over the loan life, or maybe you have mortgage insurance currently and your loan is near 80% to 85% of its current value and you want to look into getting rid of the mortgage insurance. Depending on the situation, you may also be in a good position to get some cash out.
10. Pay off an alimony or child support obligation or an ex-spouse
Does the divorce decree say you owe a certain amount that you would rather not be garnished? Look into paying a lump sum by using the equity of the equity in your home.