release equity Archives - America Mortgages

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

There’s something about having cash on hand that feels empowering. Being able to invest in projects, equities, crypto, or a business opens up endless possibilities. It could be to pay off high-interest debt or taking the family on a dream vacation before the children get too old. We hear this daily when speaking to clients that are considering cash-out refinancing.

What is a cash-out refinance?

A cash-out refinance is a mortgage refinancing option in which an old mortgage is replaced for a new one with a larger amount than owed on the previously existing loan, helping borrowers use their home mortgage to get some additional liquidity. You get the difference between the old mortgage and the new and the money can be used however you like. The amount received depends on the equity built up in your property.

How does it work?

Cash-out refinancing depends on several factors which include the value of the property, the amount owed, and how much you can qualify to borrow. Your America Mortgages loan officer can help you determine if this type of financing makes sense from a cost basis.

The potential benefits of a cash-out refinance

1. A lower interest rate on your mortgage – Let’s say you bought your home when mortgage rates were much higher. Refinancing your home can improve your financial situation if you are able to obtain a lower rate.

2. Debt consolidation – The money from a cash-out refinance can be used to pay off other high-interest debts, like credit cards and college loans. This could save you thousands in interest in the long run.
3. Credit score improvement – Building on the previous point, paying your credit card debts off in full using a cash-out refinance can build your credit score by reducing your credit utilization ratio.
4. Tax deductions – If you’re looking to improve your home using the cash from a cash-out refinance, you could potentially qualify for mortgage interest deduction.
5. A cheaper way of paying for your kid’s education – It’s every parent’s dream to be able to put their kids through college, but high-interest student loans can be extremely stressful. Using a cash-out refinance can be a good alternative if the rates are lower.
6. Inheritance – Although we advise you to speak with your attorney or tax advisor, it may be possible to reduce the amount of inheritance tax when estate planning with increased leverage.
7. Take advantage of an opportunity – With the current situation with Covid, there are a lot of opportunities that may not be available once the world goes back to “normal”. Having access to liquidity and being able to act immediately can be potentially life-changing.

So, should you do it?

Interested in 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.

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