equity release for cash Archives

After two years of meteoric price appreciation, U.S. home prices seem to have hit their peak. U.S. mortgage rates have more than doubled since the beginning of 2022, and according to CNN, the average interest mortgage payment on a median-priced home is up 73% from one year ago.

Recently the FED approved a 0.75-point interest rate hike, taking rates to their highest since 2008. These high-interest rates, combined with quantitative tightening, are pushing home prices down, a trend that Economists at Goldman Sachs and Wells Fargo expect to continue into 2023.

Many non-residents who own a U.S. property are hesitant about financing their U.S. real estate when mortgage interest rates are so high. However, there is more to the picture than meets the eye. With housing prices expected to continue dropping, many savvy investors are taking advantage of cash-out refinance mortgages.

The truth is, cash-out refinancing can be a good way to improve your financial situation – we think of it as an affordable way to borrow money if you own substantial equity in your home. The money from a cash-out refinancing can even be used to rebuild equity that you’re taking out if you decide to use it on value-adding home renovations.

With the money you take out of your property when you refinance, you can do whatever you want with it. You can stay on top of an unexpected medical or vehicle bill, finish paying back your college loans, or make home repairs.

While prices have dropped by 2.6% since the end of June, according to a CNBC article, they are still 10.7% higher than in September 2021. This is the canary in the coal mine, and foreign investors would be wise to take advantage of their equity while it’s still high.

Let’s flesh this out with an example. Imagine you purchased a home in Dallas, Texas, in 2016 for $230,000. As of November 2022, that home is valued at $460,000.

You can take advantage of that massive increase in value before it trends down by leveraging the property and extracting a substantial amount of your equity investment. The best part? You keep your U.S. property investment and its cash flow and use the extracted funds toward a new investment.

FED Chair Jerome Powell signalled that interest rates would likely reach even higher than initial targets set in September. As the value of your investment property continues to decrease, so will the potential equity you can leverage. Consider striking while the iron is hot and lock down your property value.

Don’t miss the opportunity to utilise your equity while it remains high. Let your money make you money with America Mortgages cash-out refinancing. America Mortgages has a 97% approval rate for both U.S. Citizens & Foreign Nationals. That is our sole focus and our expertise. Contact us today to speak to one of our loan officers at [email protected].

For more details, please visit us at www.americamortgages.com

The U.S. dollar has been pushing down the rest of the world’s currencies over the past few months. The Yen is at a 24-year low compared to the dollar, and the Euro and Dollar have not been on par since ’02. Day after day, it proves that it is the world’s most dominant currency, with 88% of transactions having the dollar on one side. In times of confusion, like rising global inflation and precarious geopolitical relationships, investors love the stability and safety that it offers. With the federal reserve increasing rates, even safe investments, such as treasury bonds offer a good return on investment. This has led to investors pouring money into the United States, which has increased the strength of the world’s most dominant and secure currency.

What is Cash-Out Refinancing?

Cash-out refinancing, if you do not already know, is a method of trading home equity for liquid cash. Here is a thought experiment that might help you understand a little better:

Let’s say you have $200,000 left on your mortgage, and your property is valued at $1,000,000; you would have 80% equity in that property, or $800,000. Lenders typically make you keep at least 20% in equity ($200,000), so you could borrow $600,000^[1], usually at a lower rate and on different terms^[2]. America Mortgages lets you cash out up to 70%. You would then pay it off like a regular mortgage with monthly instalments under a new agreement. This $600,000 is now a liquid asset that you can use at your discretion. With such a strong dollar, it means that there are lucrative investment opportunities at your fingertips with the extra cash.

Pros and Cons

There are pros and cons to cash-out refinancing, especially with a strong dollar.

Pros:

Access to a large amount of liquid cash.
This can be used for investments, refurbishing/remodelling, or for pleasure. Upgrades like refurbishing can boost your home value, and these investments mean you can make money in different sectors.
When living abroad and your living expenses are in currencies other than USD, this is a perfect time to take advantage of the strong U.S. dollar.
America Mortgages Loan Officers are with you from day one and beyond. We keep you updated with competitive rates because it is not just your journey; it is ours as well.
Even though rates have increased, historically, they are still low.
30-year fixed rates and interest-only options are available regardless of age.

Cons:

You need to have equity to qualify.
You may owe more as you would be refinancing your existing mortgage.
Your rate may be higher than what you currently have in place.

What does this mean for global real estate investors?

Cash-out refinancing has never proved to be more useful to real estate investors until recently. With cash-out refinancing, you can trade home equity for cash and invest it into other ventures, experiences, local currency, or products, such as treasury bonds, taking your dream trip to Mykonos, or buying that designer bag from foreign fashion houses.

With the rest of the world being so affordable, it is a great time to hold onto U.S. Dollars. Let your money make you money with America Mortgages cash-out refinancing. Contact us today to speak to one of our loan officers: [email protected].

www.americamortgages.com

[1] There are final closing costs, so this number would be lower typically; for the sake of simplicity, they’re being ignored in this thought experiment.

[2] Contingent on the lender and Cash-out refinance plan