People are leveraging their greater equity to release cash from their home in amounts sufficient to consolidate debt or renovate the kitchen and bathrooms. With the cost of living climbing every day, it’s nice to know something beneficial to homeowners is also climbing: the amount of cash they can release from their home.
The average rate for a 15-year mortgage just climbed to 5.38% (fixed) according to Mortgage News Daily, shrinking the pool of potential refinancers whose current rate is significantly above market averages. The rule of thumb is that a rate 1% lower than your current rate opens the door for smart refinancing.
But equity is also climbing across America thanks to surging property values, making the cash-out option more attractive even while the usual selling feature of a refinance — a much lower payment — grows less likely. After an appraisal, many people learn they “suddenly” own more home than they expected.
Since the amount of cash people can get is directly related to their equity, people can now get enough cash to pay off exorbitant credit cards or make critical home repairs even after paying closing costs on the new mortgage.