With an ever-increasing variety of loans and financing options to choose form, Cash-Out Refinancing is seeing increasing attention.
A cash-out refinance is a form of refinancing where a homeowner refinances their existing mortgage to gain access to equity that has been built up for their property. These funds can then be released into a bank account, offset account, or line of credit.
While this may delay the time it takes to pay off a mortgage, it can provide quick access to much-needed funds, and depending on the scenario, may be the most efficient way to proceed.
How to calculate Home Equity
In cash-out refinancing, having property with equity is crucial. Home equity is the portion of the value of a property that the homeowner owns outright.
To accurately calculate the equity available, clients will need to know the property’s current value. Subtract the remaining loan balance from this and that makes up the property’s equity.
Equity increases as the value of the property goes up.
3 Reasons for Private Cash Out Refinancing
There are a number of reasons that a client may seek to refinance their property. Here are three examples among the major draws.
Covering renovations or large expenses.
If eligible, funding home improvements by making use of equity can be a great option. It can also be used to fund a vehicle purchase, or even a holiday.
Bear in mind, though, that not all renovations can be funded through cash-out refinancing. Borrowing for structural changes, such as replacing walls or building home extensions, would better fall under construction loans than cash out refinancing.
Investing in property
Another potential reason for cashing out on equity is to acquire enough money to fund the deposit for a new property.
Pay off debts
One of the biggest reasons for taking such a loan would be to pay off other debts. If a client needs funds urgently to pay the ATO or creditors, or are at risk of losing the family home or being put into administration, home equity loans like these are an excellent choice.
Banks turning you away? Consider Private Lending
If you’re reading this, chances are that you’ve got a scenario where banks won’t lend due to bad credit history or insufficient documentation. The process can be complicated and take too long.
If a client needs funds urgently, and more traditional forms of borrowing haven’t worked out, private lending might be the best way forward.
Private lenders have a much higher risk tolerance, and will assist lo doc borrowers (and even work with clients with bad credit history) in refinancing their property.
At Gryphon Financial, this is precisely what we offer. The process is quick and simple, often taking less than 24 hours to fully process.
Within this time, we can compare options from our network of over 200 private lenders with funds ready for lending and tailor a deal to your specific scenario.
With 20 years of experience in bad credit, lo doc home loans, Gryphon Financial will help you settle difficult scenarios fast. Simply send an application in and a highly trained lending manager will journey with you from start to finish.