Is it the perfect time for a cash-out refinance?

Home equity in the South Bay is rebounding as property values climb. For the first time since 2008, home values are up while interest rates are down (they’re in the 4.30% area this week). As the equity in your home goes up, it might finally be time for that cash-out refinance you’ve needed for home improvement.

Almost 1/4th of all new refinances are cash-out. This kind of refinance has risen to 17% of all refinances since the first of the year. Unlike during the “boom” five years ago, when refinancing was quite common, property owners are using their equity for far more sound investments like specific home upgrades and debt consolidation. Property owners and investors that were lucky enough to purchase property at the bottom of the housing market now have a lot of untapped equity and are poised to make more as property values continue to rise.

The key to deciding whether or not a cash-out refinance is right for you right now is interest rates. As interest rates creep higher, the more your loan will cost you. Rates are expected to go as high as 5% over the course of the next year which can make a serious difference in a monthly loan repayment. It’s a good time to take advantage of the recent recovery before interest rates increase even more. It’s pretty much the perfect time to refinance.



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