When using the right mortgage loan products, it’s easy to get cash from your home. A home equity loan or home equity line of credit (HELOC) carries low interest rates and can be completed very quickly, giving you access to money needed for any number of expenses. However, reverse mortgages can provide you with quick cash too, and refinancing can carry a cash-out option. The best method for getting cash out of your home really depends on your financial standing and your current and future resources.
Two types of homeowners may benefit more from carrying a line of credit than from picking up a new loan. The first is a parent with children heading to college soon. Your resources will help determine family contribution when the school considers grant limits and student loan financing. In these situations, taking a lump sum against the value of your house and sticking it in the bank can really cost you.
The second type is someone headed to a nursing home, and often for the same reasons. If you have a lump sum sitting in investments, you may be forced to cash it in and put it toward your care before your retirement health benefits fully kick in. However, there are situations where refinancing is the better option. Work with a mortgage consultant to determine the best method for you, and find a successful solution to whatever money issues you’re facing.
If you’re age 62 or older, you have access to reverse mortgage products, allowing you to borrow against your home’s equity without making monthly payments against the principle. While you will have to pay monthly fees and interest associated with the loan, the principal won’t be due until the homeowner leaves the property. This gives you plenty of time to draw on the value of your house without worrying about rising living expenses. You just won’t receive as much of a payout once you move to a nursing home or when your estate is passed on.
Midland Mortgage Corporation will help you manage any residential lending situation, from getting a first time loan to refinancing investment property.