Fixed mortgage rates are currently hovering near all-time lows. While the exact rate you receive will depend on your financial standing, prospective borrowers and current homeowners now have many affordable options.
With rates near record lows, you should consider using an FHA or VA refinance to restructure your home loans into more favorable terms. In addition, you may be able to withdraw funds from the property's equity. Once this is complete, you can put these funds toward other investments, such as improving your home value.
Following the housing market collapse, home equity installment loan activity declined along with plummeting property values. However, now that prices have found their footing, it is on the rise.
In August, the home equity installment balance edged 0.3 percent higher from the previous month, according to Equifax. This is the first increase since November 2007.
"The residential real estate market finally seems to be finding solid ground," said Equifax chief economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis."
In the four years following the housing market collapse, total home equity installment loans fell 43 percent from 7.7 million to 4.4 million in August 2012. However, as activity starts to increase, lenders could be more inclined to grant these types of refinances to borrowers.
What can this money go toward?
When it comes to making home repairs and updates, some are more worthwhile than others. While certain projects can make the property more livable, others are sure to yield a return if you ever decide to sell your home.
Perhaps one of the most profitable updates is making changes to your kitchen. The kitchen is arguably the center of every home and huge selling point if you ever put the property up for sale. Specific changes, such as new appliances, countertops and cabinets, are a great way to increase the overall value of your home.
However, the money you receive after your refinance doesn't necessarily have to go back into your home. Instead, many homeowners opt to put these funds toward buying a new car and paying college tuition. Although you have the freedom to put this cash toward whatever you want, try to spend it on something worthwhile.
Getting your personal finances under control is the first step to qualifying for a home loan. Freedom Mortgage offers some of the latest advice on comprehending a fluid housing market from improving your home value to tips on comparing mortgage loan rates.
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