Have you ever considered a refinance cash out?
Everybody knows you can get a car loan to purchase a car, use a credit card for your holiday and a personal loan for that extra cash you need for that special occasion. However another option people could consider is a refinance cash out!
Given you have extra equity in your residential property, we are able to look into submitting an application for a mortgage higher than your current loan balance. The process effectively involves using the new mortgage to pay off your current loan and you obtain the difference in cash directly deposited into your account. This means not only are we able to look at refinancing for a better rate, we can also look at taking out some extra funds for many specific purposes which include:
- Home improvements and renovations for your home or investment property
- Purchase of home contents and furniture for your home or investment property
- Purchase of a motor vehicle
- Take out some extra money for a holiday
- Planning a special event- for example a wedding
The funds taken out for these purposes will all be at a home loan rate.
In addition, most lenders will also allow you to cash out extra funds for the purpose of purchasing shares or managed funds. Keep in mind as this is an investment purpose, this will be at investment rates, which are slightly higher than home loan rates. They will also need to see a letter from an accountant or financial planner confirming that this forms a part of your investment strategy.
In terms of negatives of the refinance cash out option, you’d need to consider whether you are happy with increasing the underlying debt tied to your home or investment property. Increasing your loan obviously increases the chance of defaulting and subsequently the loss of your property should you not be able to make repayments. However, if you had the right plan of attack to reduce this debt down and a sound exit strategy, this option could potentially save you hundreds or thousands due to the lower rate compared to the traditional personal loan or credit card debt.
Please contact one of our Lending Specialists on (03) 9835 8200 for further information on the best option for you and your position! Alternatively, you can complete your details below and we’ll be in touch. We look forward to hearing from you!