You’ve probably heard the phrase “your home can be your biggest asset” before. And if you’ve built up equity in your home, this can certainly be true. Because that equity can be turned into cash with a cash-out refinance, allowing you to use it however you’d like.
Now just because you can convert your home’s equity to cash doesn’t always mean you should. Financial professionals usually recommend tapping your home equity for things like home renovations or college tuition or consolidating higher interest debt and looking carefully at the pros and cons before you do.
If one of these things sounds like you, we’ve got the in-depth, step-by-step guide for cash-out refinancing. This guide will cover the Prep Work, the Process, and the Payoff.
To give you a taste of what you’ll find, let’s take a look at the first steps in the refi process.
1. Establish Your Goal
First decide what you want to do and how much money you’ll need. Figuring out the money you’ll need is typically easier for debts or college tuition. You should be able to get an exact number. The budgets for home additions can be a bit harder to estimate.
2. Check Your Credit
Your credit score can have a big impact on whether you are offered a loan and the interest rate you’ll pay. Lenders typically require a minimum credit score of 620 to 680. If you want to raise your credit score, we have some practical ways to do it.
3. Get Your Docs in a Row
Applying for a loan requires documents, pay-stubs, W2s, tax returns, mortgage payments, statements of assets and debts. Having these will help make the loan application run more smoothly.
It’s time to see the other seven steps for the process and the payoff of a cash-out refinance. Click the link below to download the free guide now!
Ditech is not a financial advisor and the ideas outlined above are for informational purposes only. They are not intended as investment or financial advice and should not be construed as such. Consult a financial advisor before making decisions regarding important personal financial matters, and consult a tax advisor regarding the deductibility of interest and tax implications.