Get Ready Cash from Your Refinance

Question To Ask Your Refinance Broker

If you are ready to refinance your home and need cash out of the transaction, you will want to spend some time learning what you can do and how to do it.

By knowing your options and what to ask your mortgage broker, you can get the cash you need without spending more than you should on your loan, and without any surprises at closing.

Conventional refinancing is the first option, and the one most people are familiar with. With this type of loan, you refinance at a lower interest rate than your existing loan, which lowers your monthly mortgage rate.

A cash-out refinance is similar to a conventional refinance, with the difference that you take out some of your equity as cash. This is useful if you need to do home improvements, pay off credit card loans, or make a major purchase. At the same time, your interest payments are eligible as a deduction on your federal income taxes.

Of course, you should always consult an accountant about the tax deductions with a cash-out refinance.

Most people are familiar with the second mortgage, which is similar to a cash-out refinance, except that you have a new loan on your home, in addition to your first mortgage. This is an option if you need more cash than you are able to get with a cash-out finance, but of course again you should always consult with an accountant or tax attorney.

Before you get a refinance loan, even before you choose a broker, there are several questions you should ask of the broker or lender you're considering.

First, you want to know what loan products are available to you. Many brokers have a favorite product, either because they make more money from it or because they feel it's better for most of their customers. By knowing everything that's available, you can make a better decision.

You will also want background information on your broker, including how long they've been in business, how many loans they've closed and the average interest rate, and some references you can call.

You want your broker to know what you can afford, and what you're looking for. Your broker should ask you questions about what you can afford, what interest rate you're looking for, how much cash you need back, and any other details about your situation that they may ask.

Knowledge truly is power. Your knowledge needs to include what you need, what's available, and what you qualify for, as well as what makes this broker right for you. Your broker needs to know what you can afford, what you want to pay, and why you're refinancing, in general terms.

Sometimes getting a mortgage can seem like dropping your trousers on Main Street , in terms of the amount of information required by a broker, and finding a broker you trust can seem almost as difficult.

The key is to be armed with questions, for yourself and your broker, and to do research on those questions and know the answers before you make any decisions.