A cash-out refi is a type of mortgage refinancing in which one borrows more than the remaining balance on their current mortgage, with the difference as cash. With interest rates as high as they are right now, refinancing for a better rate — the most frequent incentive to refinance — isn’t going to happen. That means a greater percentage of refis are of the cash-out type.
It’s uncertain whether the number of cash-out refis is increasing; their percent share is going up mainly due to fewer rate refis. There are other reasons to see an increase in cash-out refis, though. One is that retirees, whose numbers are presently on the rise, are wanting to invest money in repairing or remodelling their homes, and are using the cash from a refi to do so. In addition, two other options for cash, home equity loans and lines of credit, are no longer tax-deductible to the extent they were previously.
If you’re considering a refi, give us a call. We don’t handle loans, but have over 25 years of experience with lenders in LAs South Bay, and can help you select from the best.