Home equity (also known as real property value) is the difference between the home's fair market value and the outstanding balance of all liens on the property. Equity increases as the payments are made against the mortgage balance and as the value of the property appreciates. For example: Home Value = $300,000. Mortgage Balance = $150,000. Equity = Home Value - Mortgage Balance = $150,000 .
Your home equity can be a source of cash to :
- Reduce your interest rate
- Decrease interest costs
- Consolidate existing debt
- Increase your cash flow
- Start and/or build your investment and wealth management strategy
- Access equity for home improvements and renovations
TIP !!
You need to have enough equity in your home , to be able to refinance . Most lenders will allow refinancing for up to 75 % of your house value , or even higher.
COSTS INVOLVED WITH A REFINANCE :
- Most lenders will require an appraisal , and the cost for the appraisal may be a cost to you .This can be anywhere from $250 to $450 .
- Legal fees .A transfer / refinance follows the same procedure as a new mortgage .A new mortgage involves a new contract , contract that has to be signed at the lawyer's office , and the cost is to you ( with some exceptions ) .
- Paying out debts . If you have debts , the new lender may require you to pay all or a portion of it , as a condition for refinance .
Refinances can be a sound financial strategy if guided by a savvy hand. Allow Argentum specialists to show you how.