Refinancing to Refurbish Your Finances

By Karen Lawson
Local Lender Columnist
Aug 15, 2007
What is the best way to make use of home equity? Depending on real estate trends in your area, and how much equity you have, home equity can provide cash that can be used to improve your financial situation. Here are some things you'll want to consider when reviewing refinancing options.

Eliminate High Interest Rate Debts

Mortgage loans are typically offered at rates far less than consumer debt such as credit cards and installment loans. Retiring high interest rate debt through refinancing will allow you to repay the debt sooner at a lower interest rate. There may also be tax benefits associated with debt consolidation through refinancing. Please consult a tax advisor to determine potential tax advantages.

Refinancing for Remodeling

Certain home improvements such as kitchen and bath updates can add value to your home. If you're planning to keep your home, you can make more personalized improvements such as adding a home theater room or lap pool. If you're making improvements before selling your home, New Jersey real estate professionals can provide information about local buyer preferences.

Cash for College, Business, and Investments

Before refinancing to fund your kids' college expenses, it's a good idea to check out low interest federal student loan rates. However, if you're repaying college loans at higher rates, refinancing may provide lower rates and payments. If you need cash for investments or starting a business, it's a good idea to consult a financial advisor to develop a "big picture" approach to achieving your financial goals with minimal risk. Mortgage refinancing can be a great source of cash. Prioritizing your financial needs and goals can help you get the most out of refinancing.

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.