Hellobee Boards

We actually just did this!
Our house is worth double than what we paid for it back in 2010
We only took out $20,000
But still hold Much equity and our payments are lower and we still owe way less than what our house is worth, to me it so worth it, extra money to do some projects and fix it up!

@Raindrop: We just really wanted to do some extra work on the house and wanted to lower our monthly payment if we could... honestly didn't even look into second mortgage and the home line of credit was only if we took out a certain precent and we just didn't want to go that high

@Mrs D: true but I think it matters too of your circumstance then and now, me and DH purchased this house when we didn't have the careers/credit we do now, even with cashing out our interest rate went from 5.6% to 3.3%

@Raindrop: What are your closing costs associated with doing the cash out refinance?

@Raindrop: okay, so I would call a few banks and get their mortgage fees for a cash out refinance. We looked into either opening a HELOC or doing a cash out refinance for me rental property and the clothing costs for a cash out refi were much higher than a regular refi. It ended up not being worth it for us.

So factor in the closing costs when you run your numbers. You can also do a rent-back situation after you sell your house (you sell, but rent back from the new owner for 2 months or however long so you aren't rushed to buy). Then you have the cash in hand from your sale, but are unhurried. If you are in a hot market, people are usually very willing to do that, if you tell everyone up front that you are looking to rent back.

@Raindrop: oooh, what was the terrible experience? I love to hear these stories. Rent back is super super common in our area, but my husband is VERY cautious about these things and did not want to do it (we were on the buying end), because he was convinced that major horrible things would happen to the house while the previous owners were still living in it, and we would all fight over it--like an appliance dying, or them damaging all the hardwoods, etc.

On the other hand, I know a lot of people who have had a lot of success with it. It definitely seems better for the seller, who continues to live there while someone else owns it.

@Raindrop: ohhh yeah. the rent back has to be written in, and ideally, there should be a lease agreement--same as any lease agreement, specifying the length, the payment, etc.

i'm looking into similar options at the moment (refinancing, maybe cashing out). i'd definitely contact some lenders and see what the rates/closing costs/etc will be for your particular situation. that could help determine whether HELOC is better or cash out refinancing. the mortgage rates are so low right now tho,i think cash out is a better option, esp with so much equity. but i'm def not a financial advisor . i've seen rates in the low 3% for a 30 year fixed. you may have to pay a couple thousand for OOP costs though. i've inquired with some lenders through nerdwallet in the mortgage section. there are some low rates and good reviews for some of these companies. so i'd inquire and see what a good option is for you!

@Raindrop: oh haha i mean the low 3 percents, so like 3.25, 3.3 etc. thats just on nerdwallet though. after inquiring with a company, it looks like to get those rates, you need to bring in a coupel thousand for closing costs. which isn't too bad. not as bad as the original closing costs. but yeah i'd actually inquire about the rates with a company, because you might be surprised! like if you use that calculator on nerdwallet, you can get "instant rate quotes". so i'd see what you get for the new principal amount (with the cash out amount). maybe compare with and without the cashout amount and see what rates you get.

ETA - https://www.nerdwallet.com/mortgage-rates this calculator.

ETA #2- the company i've been corresponding with gave me a couple options. one was the rate that you see on nerdwallet, but you have to bring in a couple thousand at closing, the other options were higher rates, but lower out of pocket costs at closing.

@Raindrop: i'd def inquire with some lenders then! its easy to do through email or a short phone call. i think thats the only way you will be able to get some concrete numbers and answers. good luck!

@Raindrop: to jump off anagram, our closing costs were so minimal compared to the lower rate and such, so definitely check it out!!