Have Your Cake, and Eat it Too!
You don't have to sell your house in order to tap into the equity contained in your walls. By refinancing
your existing loans, you can often replace higher-rate loans like credit cards and personal loans
with a lower-rate loan (sometimes at a fixed rate).
And interest paid on a mortgage or home equity line of credit is typically tax-deductible, too! That means
that you save money twice.
There are lots of different ways to refinance a property. I will take the time to educate you
about the different options available and I will work with you to select the option that is right for you.
You be the Bank
One option which is attractive to a lot of people is the home equity line of credit (HELOC). With a
home equity line of credit, you keep any existing loan on your property but you take out a line of credit which is equal to the amount
of equity that you have in your home. (Equity is the difference between what your home is worth, and
what you owe on it). Then, just like a credit card, you only pay for that portion of the credit line which you
actually use.
Pretty cool, huh? If you don't use your line of credit, you pay nothing(*).
But once you have established a line of credit, you can use the money for anything you want.
This lets you literally be the bank.
Need some money for a special project or to start a business? You don't
need to apply for a loan. Just write yourself a check and you're on your way.
See Dick Refinance. See Dick Spend Himself Into Oblivion Again. Don't be a Dick!
Some people just can't seem to control their spending. For these people, refinancing can be very
dangerous. Used judiciously, a refinance can save an individual or family hundreds or sometimes
thousands of dollars a month. A strategic refinance can also be a great way to separate
equity from a property to build wealth.
I love to see this happen -- it is very satisfying to
help a family or an individual take positive financial steps.
However, if used imprudently or irresponsibly, a refinance can also create an
additional financial burden of hundreds or sometimes thousands
of dollars a month. That's very bad. I work with my clients to make sure that they understand
the ramifications of a refinance, but ultimately it is up to the client to have the financial discipline and
self-control to act wisely and responsibly with their own financial future.
(*) Well, almost nothing. There are usually fees associated with
setting up the line of credit, and then often there is a small yearly fee (like $25) even if you don't
use the line of credit. But it's a small price to pay for having tens or hundreds of thousands of dollars
at your disposal without so much as a credit check.