If you've been putting off a much needed kitchen or bathroom remodel, or are living with drafty windows and a leaky roof because you don't think you can afford to fix them, good news! The source of your headache may also hold the key to the solution. If you have equity in your home, you can tap into that money to pay for repairs and upgrades. All you need to do is set up a cash-out refinance.
Rates are at historic lows right now and in most cases, you can lock in a lower rate for the new mortgage than you had for the old one.
Say, for example, you took out a mortgage for $100,000 at 8.5 percent on January 1, 1990. Your payments are currently $768.91. If you haven't paid down the principal, your balance as of January 1, 2007, would be $72,458.41.
When you transfer your debt to a new lender, you will be offered the option of taking cash out. If you secure a new $100,000 loan at the current rate of 5.96 percent, your payments would drop to $596.98 and you'd have a check for $27,541.59 in your pocket.
You could do a lot with that money. According to Remodeling Magazine's 2005 Cost vs. Value Report, a mid-range bathroom remodel costs $10,499, a mid-range kitchen remodel runs around $14,913, a new roof costs approximately $11,164 and new windows $9,684. You may still want to wait a while to take on the kitchen and bathroom remodels, but you'd certainly have enough cash on hand to replace the roof and windows.
Ready to find out what kind of deal you can qualify for if you refinance? Log on to www.LowLender.com and fill out their quick, free online form. You'll receive quotes back from several lenders interested in doing business with you.
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