The summer of 2014 at Adam Leitman Bailey, P.C. has been busy with several cash-out refinances. The equity holdings in borrower’s homes are rising again, and cash-out refinances have become an attractive choice for borrowers with excellent credit and equity in their homes.
Unlike in the past, current borrowers of cash-out refinances closing with major lenders at Adam Leitman Bailey, P.C. are using their cash for intelligent purposes and are held under a much stricter lender underwriting process. Most borrowers the firm has closed have had low balances on their current mortgages and homes with high equity due to rising home values.
At closing, borrowers refinance to pay off their old mortgage and take a new mortgage for $20,000, $50,000, $100,000, etc. more at interest rates which are still very low on a 30 year fixed rate, anywhere from four percent to just below five percent, even lower if they choose an adjustable rate or 15-year loan.
When speaking to Adam Leitman Bailey, P.C.’s borrowers at closings, they all have similar situations. They all have a need for cash, for intelligent purposes, such as consolidating debt, investing in a new property or sending their children to college. They also all have exceptional credit scores. In the past, borrowers pulled money out of their homes for less prudent purposes such as vacations and cars.
While cash-out refinances may not work for everyone, it is worth consideration for borrowers who have a successful home investment and would like to pull money out at fixed rate for financially sound uses.