Cash Out Refinance

[jaihawk]

Posting this here as well, as I'm not sure how much traffic the board I posted this on gets...

I'm looking at putting a pool in for the wife and kids and it looks like my best option for financing part of it would be to do a cash out refinance. I don't have any experience with these and am not sure what to expect.

House Value - $500k
Current Loan - $97k

I'm looking to take out another $100k to use towards the pool, so loan would be $197k. I assume that if I don't use all of the $100k that I can just put it towards the principle.

I haven't looked at rates in years, but I'm guessing they are going up and I'm guessing rates for a cash-out refinance are probably higher than a normal refinance.

Anyone have any experience/recommendations? Our current loan is with West Gate. They've been good, but I never know how competitive they really are.

Thank in advance for your help.

 

[Cash68847]

Posting this here as well, as I'm not sure how much traffic the board I posted this on gets...

I'm looking at putting a pool in for the wife and kids and it looks like my best option for financing part of it would be to do a cash out refinance. I don't have any experience with these and am not sure what to expect.

House Value - $500k
Current Loan - $97k

I'm looking to take out another $100k to use towards the pool, so loan would be $197k. I assume that if I don't use all of the $100k that I can just put it towards the principle.

I haven't looked at rates in years, but I'm guessing they are going up and I'm guessing rates for a cash-out refinance are probably higher than a normal refinance.

Anyone have any experience/recommendations? Our current loan is with West Gate. They've been good, but I never know how competitive they really are.

Thank in advance for your help.

I just heard on the news a 30 year loan is closing in at 5 percent. People think that’s high, but people got spoiled. That use to be a great rate.

 

[Ext. 55]

Posting this here as well, as I'm not sure how much traffic the board I posted this on gets...

I'm looking at putting a pool in for the wife and kids and it looks like my best option for financing part of it would be to do a cash out refinance. I don't have any experience with these and am not sure what to expect.

House Value - $500k
Current Loan - $97k

I'm looking to take out another $100k to use towards the pool, so loan would be $197k. I assume that if I don't use all of the $100k that I can just put it towards the principle.

I haven't looked at rates in years, but I'm guessing they are going up and I'm guessing rates for a cash-out refinance are probably higher than a normal refinance.

Anyone have any experience/recommendations? Our current loan is with West Gate. They've been good, but I never know how competitive they really are.

Thank in advance for your help.

It’s your equity. You are basically giving yourself a loan at the banks going rate. If you are good with the rate and payment. There you go.

 

[jaihawk]

Does anyone have anybody that is ultra competitive with rates? Want to get the best deal I can but don't want to spend forever contacting a crap ton of banks.

 

[Jim14510]

Depends if you're realistically going to stretch it over 15-30 years. If you think you're going to pay it off quicker a line of credit could make more sense. Lower fees but generally rate is 100% variable to only locked for 5 years. Guessing right now those are going to be variable. So if interest rates blow up and you're only able to pay interest or a little more than interest the LOC is a bad idea. If you've got cash but just don't want to use it because you're using it as a rainy day fund the LOC makes more sense.

If your current interest rate is lower than what they're offering and you don't want to do the LOC option then do a 2nd. Don't do a cash out refinance.

Either the 2nd or the cash out refi I'd still get yourself a LOC of 100k. I have the max LOC I can get at all times as my rainy day cushion.

 

[Boondock_St_Sker]

Depends if you're realistically going to stretch it over 15-30 years. If you think you're going to pay it off quicker a line of credit could make more sense. Lower fees but generally rate is 100% variable to only locked for 5 years. Guessing right now those are going to be variable. So if interest rates blow up and you're only able to pay interest or a little more than interest the LOC is a bad idea. If you've got cash but just don't want to use it because you're using it as a rainy day fund the LOC makes more sense.

If your current interest rate is lower than what they're offering and you don't want to do the LOC option then do a 2nd. Don't do a cash out refinance.

Either the 2nd or the cash out refi I'd still get yourself a LOC of 100k. I have the max LOC I can get at all times as my rainy day cushion.

Wait...so you have a loan as a rainy day fund?

 

[That SOB Van Owen]

Wait...so you have a loan as a rainy day fund?

I think he’s saying he has the line established so he can draw on it in the case of a “rainy day”

 

[Faux Sean Callahan]

I think he’s saying he has the line established so he can draw on it in the case of a “rainy day”

Yeah, doesn't make sense to carry too much cash.

 

[Jim14510]

Yeah, doesn't make sense to carry too much cash.

Wait...so you have a loan as a rainy day fund?

Right. I mean you could say my investments are a rainy day fund too but if I have an oh shit I need 2k moment. I'm not going to pull it out of my investments. I'm going to draw on the line and pay it off in a month or 6 (depending on amount) with the money i would have invested if i didn't have the line to pay back. Plus it's easier transferring money to and from since checking and LOC is the same bank.

I may lose sometimes by paying more interest than my investments earned in the same period of time but over the long haul I'm definitely winning leaving the money invested and paying the interest. Especially the last 10 years.

Interest rates shoot up it may be a different story.

 

[Faux Sean Callahan]

Right. I mean you could say my investments are a rainy day fund too but if I have an oh shit I need 2k moment. I'm not going to pull it out of my investments. I'm going to draw on the line and pay it off in a month or 6 (depending on amount) with the money i would have invested if i didn't have the line to pay back. Plus it's easier transferring money to and from since checking and LOC is the same bank.

I may lose sometimes by paying more interest than my investments earned in the same period of time but over the long haul I'm definitely winning leaving the money invested and paying the interest. Especially the last 10 years.

Interest rates shoot up it may be a different story.

100%

With interest rates still in the 3% for this it makes a ton of sense. Shit say you have a 10k expense. If you pay it off over a year you are looking at less than $170 in interest.

 

[Drue629]

I'm a lender, there are so many variables to determine if it's reasonable or not. What's your current rate and how many years do you have left on your mortgage? People are never in the same house/loan product for 30 years. It's not 1965 anymore. It seems like you're in a pretty good situation and personally, I would take the money out. If you take $100k out that's what you're getting. If you don't use all of the $100k then it would just stay in your bank account, not go towards the principal. You would close on the loan and that money goes straight to your bank account to do whatever you want with it.

 

[MtnHusker]

Posting this here as well, as I'm not sure how much traffic the board I posted this on gets...

I'm looking at putting a pool in for the wife and kids and it looks like my best option for financing part of it would be to do a cash out refinance. I don't have any experience with these and am not sure what to expect.

House Value - $500k
Current Loan - $97k

I'm looking to take out another $100k to use towards the pool, so loan would be $197k. I assume that if I don't use all of the $100k that I can just put it towards the principle.

I haven't looked at rates in years, but I'm guessing they are going up and I'm guessing rates for a cash-out refinance are probably higher than a normal refinance.

Anyone have any experience/recommendations? Our current loan is with West Gate. They've been good, but I never know how competitive they really are.

Thank in advance for your help.

Where do you live? We have to have some Mortgage people on here. If you are pulling cash out you will pay a higher interest rate.

 

[That SOB Van Owen]

How the fuck has no one ITT recommended JFQ lending yet?

 

[huskermack]

How the fuck has no one ITT recommended JFQ lending yet?

JFc LeNDing is FoRR THe ReTARdED.

 

[jaihawk]

I'm a lender, there are so many variables to determine if it's reasonable or not. What's your current rate and how many years do you have left on your mortgage? People are never in the same house/loan product for 30 years. It's not 1965 anymore. It seems like you're in a pretty good situation and personally, I would take the money out. If you take $100k out that's what you're getting. If you don't use all of the $100k then it would just stay in your bank account, not go towards the principal. You would close on the loan and that money goes straight to your bank account to do whatever you want with it.

Current Rate is 3.25% and I've got about 22 years left on the loan currently. I definitely was planning to put back against principle anything that wasn't used on the pool.

 

[jaihawk]

Where do you live? We have to have some Mortgage people on here. If you are pulling cash out you will pay a higher interest rate.

Lincoln

 

[Faux Sean Callahan]

How the fuck has no one ITT recommended JFQ lending yet?

JFQ JFQ JFQ

 

[jaihawk]

OK, so I got some numbers back from West Gate.

If I do a cash-out refinance, I'm looking at a 4.675% rate for 30 years. Total Payment of $1,625.45 for the new loan.

If I do a HELOC, it's a 4.5% rate for 7 years, with a balloon payment at the end of that. Total Payment during that time would be $1,519.94 (mortgage + HELOC).

Difference between the two options would be $105.51/month which equates to $8,862.84 over the 7 year time period. Only risk is what rates look like in 7 years when I have to redo the HELOC.

I'm thinking that a savings of almost $9k over 7 years is worth that risk.

Thoughts?