When a person has built up equity in their home, they may want to take out a loan using that amount as collateral to pay for emergencies, education or a luxury vacation. Depending on the interest rate of the loan as well as that of the home mortgage, it may be worth looking into securing a remortgage loan to reduce interest costs as well as getting the extra cash needed, without the need for a second mortgage on the property.
One of the advantages of a remortgage loan is that any amount you have in equity can be taken out as cash. For example, your home is appraised at 150,000 and the mortgage balance is 100,000, with good credit you can refinance the house for up to its appraised value and paying the existing loan of 100,000 leaves an additional 50,000 that you can use for other purposes. Remodelling, education, or just for fun.
Additionally, exploring the going interest rate may enable you to refinance and obtain a lower interest resulting in lower monthly payments, leaving additional money in your pocket each month. The equity in the home can be taken as cash or left in place for some future emergency with the remortgage loan paying off the previous...
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