Are you considering a cash out? Now is a great time as stocks skyrocket!
The record increase in home prices in recent years has propelled tangible home equity to new heights!
According to a report released this week by data provider Black Knight, the third quarter of 2021 saw a record increase in tangible equity of nearly $ 250 billion – a record. With a record high of vulnerable home equity, now is a good time to consider a payout refinance to fund those projects or repairs around the home, start an extension, consolidate high interest debt, or whatever you need the extra for Need money.
The Black Knight report also highlights the fact that the $ 9.4 trillion grand total is a staggering 32% from the same time last year and nearly 90% higher than the pre-great recession peak in 2006.
That is about $ 178,000 is available to the average homeowner in tangible equity!
Did you know that with a cash out refinance, you can make a down payment on an investment property? With the Griffin Funding Bayside No Income DSCR Loan, you don’t have to submit your personal income or tax return. Easily qualify the rental income of the investment property.
Overall, mortgage holders withdrew more than $ 70 billion in equity in the third quarter, which is just 0.8% of available equity at the beginning of the quarter, the report said. Year-on-year, more than a million cash-out refis were issued. It is also noteworthy that the proportion of cash-out refinancing will continue to rise if mortgage rates continue to rise in the next few quarters.
Some of the cities with the highest concentrations of vulnerable capital in the country are Los Angeles, San Francisco, San Jose, and Seattle. Additionally, the Black Knight report states that the monthly policy and interest payment for buying an average home price has increased nearly 25%, declining 20% since early 2021.
The housing shortage continues to put pressure on home prices, and these are likely to continue to rise in the foreseeable future. Even if home prices remain stable, an increase in 30-year rates to 3.5% will result in the scarcest affordability since 2009.
Here are just a few ways to take advantage of a cash out refinance:
- Build up emergency savings
Emergency funds can turn a potential disaster into an inconvenience. Examples of emergencies include unexpected job loss, car repairs, medical emergencies, or home repairs. Many experts recommend putting at least three to six months of living expenses in an emergency fund. This amount avoids the stress of looking for funds or borrowing money.
- Pay off high-yield debt
With a cashout refinance, you can get funds to pay off your high-yield debt. Target the debt with the highest interest rate. The more equity you have, the more withdrawals you can use. The sooner you pay off debt, the less interest will be paid in the long run. See below how cheap it can be to withdraw cash.
- Increase pension contributions
The longer pension funds are in the market, the more they will put together and grow. So the sooner and more you contribute, the better. By using the equity in your home to withdraw cash at a low interest rate, you can then invest that money in faster investments with higher returns.
- Invest in education
Additional training, education, and professional licenses could make you a good candidate for your next big promotion or raise. You can also use the money to save or pay for your children’s education. Education is not cheap, but it is very valuable.
Strategic renovations and upgrades can add value to a home. Perhaps you’ve been waiting to start remodeling the kitchen or adding an annex – now is a good time to use whatever equity you have while prices are still low. Get your much-needed renovation or repair work today.
- Buy an investment property
You could use cash from refinancing your primary residence to buy additional property, such as a rental or investment property. As an asset class, real estate can build wealth quickly because you can leverage your purchase. This is a great way to expand your real estate portfolio. In many cases, homeowners take out a home loan and buy a rental property cashless. If you want to invest again, refinance your existing investment property to buy another. The result is a robust collection of rents that generate ongoing income and tend to hold their historical value.
If you haven’t thought about a cash out refinance, now is a good time as interest rates are still very low historically.
Griffin Funding Bayside is licensed in: Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Maryland, Michigan, Montana, Tennessee, Texas, Virginia and Washington!
We specialize in VA and non-QM loans, have access to wholesale pricing, and offer to beat or match any price in the market! Would you like to learn more? Contact us online or call us at 619-393-8458 for a no-obligation consultation.