I have a lot of credit card debt. Is it a good idea to put it into my mortgage?
It can be a very positive financial move if you have enough equity in your home to refinance your mortgage and use the funds to eliminate credit card debt. It’s important to remember that it’s still debt but you’re able to pay it off at a much lower interest rate, which means it costs less to carry. It could also make your monthly cash flow significantly more manageable.
How much money can I get out of my house?
You must have 20% equity left in your home to refinance. So, for example, if your house is appraised at $400,000 and you currently owe $280,000, the maximum new mortgage amount would be $320,000 ($400,000 – $80,000 in equity). In other words, you would be able to get $40,000 out of the home ($320,000 – $280,000 already owing).
What if I don’t have at least 20% equity in my home? Can I still refinance?
Unfortunately if you don’t have 20% or more equity in your home, you’re not able to refinance at this time.
Is there a cost to refinance?
There’re always closing costs (legal and title insurance), and in some cases there may be a penalty to closing your current mortgage, but with the amount you save in interest, it’s often still financially beneficial. The costs are typically taken from the equity of your home and therefore you are not required to have that amount already in your account.
Do I have to stay with my current lender to refinance?
Absolutely not! We evaluate the market and pick the lender that can offer you the best mortgage for your needs.
Do you have to have good credit to refinance your mortgage?
Even though it’s called a refinance, you’re still applying for a new mortgage. A positive credit rating is part of the qualifying process.
Are there any limitations to what we can use the money for once we receive the equity from the home?
In some cases, the lender may stipulate that certain debts must be paid in order to qualify for the higher mortgage amount. That said, the money from a refinance can be used for anything: paying off debt, renovations, a downpayment on a second property, etc.