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Let the Equity in Your Home Pay for Holiday Expenses
Read Time: 5 Minutes|
December 1, 2022
Even in challenging economic times, the spirit of the holiday shines brightly. And there’s nothing like being home for the holidays - especially with some extra cash to spend!
Whether it’s bigger items like upgrades to your home in advance of entertaining guests, presents for everyone on your list, or even a holiday vacation at an exotic locale to ring in the New Year, there’s nothing like the joy of giving. But where can you get access to cash ahead of the holidays?
Well, some extra good cheer could come your way simply by doing a cash-out refinance†. Here, homeowners can access their home equity and get access to cash.
Let’s take a closer look at a few holiday expenses that some newly found bucks could help cover.
Gifts for the Special People in Your Life
Giving gifts can be joyful, and we get to imagine what loved ones might enjoy receiving.
Often the best gifts are those that are given mindfully. One idea is to give “charity.” In this scenario, you supply the funds and the person on your gift list chooses the charitable recipient. It's a great gift for young people because they get to consider and evaluate charities.
Another idea is to give the gift of an experience. These can range from a gym membership, to dance lessons to a trip abroad.
Sometimes people give a special someone a big-ticket item like an engagement ring or even a car. We’ve all seen television commercials where the snow is falling, and a surprised person opens their eyes to a shiny new car with a giant bow.
Of course, these are examples of the higher-end type of gifts but no matter what gifts you choose, they will cost a few dollars and that’s where a cash-out refinance may come in handy.
Renovations for the Holidays
Replacing your front door or even repainting your current door can help create a great first impression. A bright front door can stand out, particularly with matching shutters.
Another idea to create more space is to merge the living room and kitchen into one. You’ll likely want to install a new counter between the two areas to complete your new space. Your holiday guests are sure to enjoy the festive atmosphere.
How does a cash-out refinance work?
When you take out a mortgage to buy your home, a portion of your monthly mortgage payment pays off the principal amount (the amount of money you originally borrowed without interest). With each monthly payment, you increase your home’s equity, which translates to wealth that is built up over time. Once you’ve traded in your home equity for cash, it’s your money to use any way that you want, though it’s probably smart to use it for worthwhile investments, such as home improvements.
Here are two important facts about a cash-out refinance:
- There are a variety of loan types to choose from.
- You can use the cash any way that you want.
If you’ve built up enough equity in your home, it may be a good idea to consider doing a cash-out home refinance – and what better time of year to have some extra cash!
How does the Newrez Home Equity Loan†† work?
Newrez Home Equity Loan is our new loan program built specifically for homeowners looking to tap the equity in their house without giving up their current mortgage. Keep your primary mortgage interest rate on your current loan when you secure a second mortgage. This new mortgage product has a fixed interest rate and is disbursed in a lump sum at the beginning of the loan. You’ll start repaying it immediately through fixed monthly Principal & Interest (P&I) payments. Plus, a Home Equity Loan with Newrez is secured by your house. This means you access larger sums of money at lower rates than credit cards or personal loans.
Lenders determine how much you may borrow by considering the amount of equity in your home, your credit score, and your debt-to-income ratio. With a Newrez Home Equity Loan, we can lend up to 80% of what your home is worth. Once your fixed interest rate and monthly P&I payments are determined, you’ll receive the cash value as a lump sum at the initiation of the Home Equity Loan.
You can use your home equity loan for just about anything. Popular uses include home improvements, college tuition, a vehicle purchase, and debt consolidation. People often turn to home equity for big milestones and life events, such as a wedding, education, moving costs, vacation, adoption, fertility treatments, or other medical expenses. Whatever your plans, home equity can provide the funds to make it happen.
Have any questions? We’re here for you. Give us a call today!
DISCLOSURE: By refinancing the existing loan, the total finance charges may be higher over the life of the loan.
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