Last saved by: Lynn Marie Greaves

If you are thinking about major home improvements this season, you may want to consider a cash-out refinance to fund your project. A cash-out refinance allows you to tap into your built-up equity to take cash out, and replace your current mortgage with a new one.
Questions to consider:
* Is the cost of a cash-out refinance LESS THAN the cost of using credit cards or a personal loan for home improvements?
* Will the improvements significantly increase the value of your home, if you intend to sell in the future?
* Will the home improvements (such as a new HVAC system, solar panels, window replacements, etc.)  save money on energy costs over time? If so, what is the estimated savings that can be applied to your mortgage?
Most lenders require a minimum credit score of 620 for this type of financing, with a maximum debt-to-income ratio of 43%. You also may need to maintain at least 20% equity in your home to guard against market changes.
While the mortgage interest and expenses for improving your home may be tax deductible, this lump sum of money can also be used to pay down debt such as college tuition, high-interest credit card debt or emergency expenses – with only a single repayment to keep track of.
Give me a call if you would like to run the numbers and see if this type of loan makes sense for you in the long run. We’re here to help!