Achieve Your Goals with Refinancing

By Karen Lawson
Local Lender Columnist
Nov 23, 2007
Refinancing is the traditional method of converting an adjustable rate mortgage to a fixed rate, or to lower interest rates. Rapidly increasing property values in the San Francisco area have provided homeowners with financial flexibility in the form of home equity.

Accessing your home equity can help you address major expenses such as home improvement projects, generating cash flow for business and investment purposes, or for consolidating debt. Of course, if you have a mortgage with terms you'd like to change, you can also take care of that, too.

Cash-out Refinancing and Your Home Equity

You've heard plenty about nest eggs; retirement and investment accounts, and readily accessible savings for short and long term emergencies. Your home equity can provide additional cash and serves as collateral for cash-out refinancing. As with any major fiscal decision, it's a good idea to discuss your plans with a financial advisor. Comparing the annual percentage rates, or APRs, of home equity financing options can help you save money. Ask questions, and avoid taking out more cash than needed for specific purposes. A popular reason for cash-out refinancing is to pay off significant amounts of higher interest consumer debt. This is useful only if you're certain you won't accrue future balances on your credit accounts, but debt consolidation can help clean up your household budget and provide more cash flow for savings, vacations, and other goals.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds a Master's degree in English from the University of Nevada, Reno.