What is the purpose for this loan? Are you purchasing a new home, need to refinance or get a cash out refinance?
The process of acquiring a property for the purpose of primary residence, second home or investment property.
- All interest on the mortgage is tax deductible.*
- Establishes credit history.
- Secured investment.
- May build equity.
- May be used to borrow against.
The process of paying off one loan with the proceeds from a new loan, using the same property as security. Cash received by the borrower at closing may not exceed $2,000. Status varies depending upon State Law. The purpose is, as the name implies, to reduce the interest rate, payment, and/or overall term of the mortgage.
- Reduction of the interest rate, payment, and/or overall term of the mortgage.
- Limit of $2,000 cash (varies depending upon State Law).
Cash-out refinances are deemed to have a higher risk factor than either rate & term refinances or purchases due to the increase in loan amount relative to the value of the property.
- A lump sum of money at closing for large purchases.
- Easy to qualify if equity has been built.
- Tax benefit is if loan is used to pay off other debt on which interest is not tax deductible.*
- Interest rates are usually lower on cash out refinance loans than they are on home equity loans.