Cash out Refinance

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JohnnyRedBeard
Posts: 24
Joined: Tue Dec 20, 2016 2:44 pm

Cash out Refinance

Post by JohnnyRedBeard »

Just curious..
I locked in at 2.875% 30 year fixed loan with $25,000 cash out for some home improvements.

Seems like a reasonable rate. I'm not sure if there was much better out there?
Silk McCue
Posts: 4825
Joined: Thu Feb 25, 2016 7:11 pm

Re: Cash out Refinance

Post by Silk McCue »

I guess it would depend on what the points and closing costs are.

Cheers
manatee2005
Posts: 1034
Joined: Wed Dec 18, 2019 9:17 pm

Re: Cash out Refinance

Post by manatee2005 »

JohnnyRedBeard wrote: Thu Nov 19, 2020 8:06 pm Just curious..
I locked in at 2.875% 30 year fixed loan with $25,000 cash out for some home improvements.

Seems like a reasonable rate. I'm not sure if there was much better out there?
Check the big refinance thread.
checkyourmath
Posts: 60
Joined: Wed Nov 18, 2020 12:46 pm

Re: Cash out Refinance

Post by checkyourmath »

Sounds like a great in idea. What could go wrong? Housing is currently undervalued and interest rates are only going up.
regularguy455
Posts: 240
Joined: Tue Jul 18, 2017 2:08 pm

Re: Cash out Refinance

Post by regularguy455 »

checkyourmath wrote: Thu Nov 19, 2020 10:11 pm Sounds like a great in idea. What could go wrong? Housing is currently undervalued and interest rates are only going up.
Sarcasm and username checks out
checkyourmath
Posts: 60
Joined: Wed Nov 18, 2020 12:46 pm

Re: Cash out Refinance

Post by checkyourmath »

Oh please we haven't been here before. Pre 2008 cash out refinance was super trendy. If you can't afford a home improvement don't purchase it with leverage. You are already get the bonus of leveraged home appreciation. We have more unknown variables than anytime in the last 100 years. DXY is falling and interest will only go down. There is no sarcasm there.

Checkyourmath is a great username. Mathmajor was already taken since I was a math major at a large public U.
Flyer24
Moderator
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Joined: Sun Apr 08, 2018 4:21 pm

Re: Cash out Refinance

Post by Flyer24 »

Let’s stay on track with the original post please.
Golf maniac
Posts: 586
Joined: Wed Dec 27, 2017 2:02 pm
Location: Florida

Re: Cash out Refinance

Post by Golf maniac »

For OP, no one on here can provide the answer for you. There are too many variables like location, credit profile, home characteristics. You need to put in the legwork and see if it is a good deal or not for you. I would suggest looking at local banks, credit unions, national lenders, a broker, and online sources such as Aimloan. Review the rates and closing costs from multiple lenders and you will know which is the best deal. Good luck!
niceguy7376
Posts: 2782
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: Cash out Refinance

Post by niceguy7376 »

In the big picture for the broker, cash out or no cash out, as long as the loan amount is less than 60 or 70% of the value of the house, they will do it. What is your current loan amount, interest rate, remaining term of the loan? What would be the LTV (Loan to Value) of the new loan to the expected appraisal value of the home?

What are the closing costs.
If you are ONLY refinancing for the 25K, then you need to see what is the opportunity cost of that.
How much in closing and how much in extra interest you might pay over the new loan duration compared to the remaining interest you will pay on the current loan? It might be less or more

After factoring in all those costs, see what that 25k really costs.
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