Ways to Take Advantage of the Current Housing Market
Home values have seen a dramatic increase in the past year-plus, opening the door to many options for homeowners and potential homebuyers.
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The housing market has seen a significant boom over the past 18 months, since the start of the pandemic.
With record low interest rates and desires for living arrangements with more space, homeowners and first-time home buyers have searched feverishly to acquire the house of their dreams.
As a result of this reality, prices for homes have seen a spike. In correlation, homeowners looking to stay put into their current homes have a unique opportunity to maximize their investment.
These are some options for homeowners to cash in on their home’s rising value.
Cash Out Refinance - replacing your current mortgage with a larger one, at a lower interest rate
Traditional Refinance - reducing your monthly payment and overall cost of your home in the long run
No-Closing-Cost Refinance - having up-front fees to cover expenses worked into a new mortgage
Tap Into Your Home Equity Options - providing predictable, fixed payments to achieve financial goals
Homeowners who already have a great interest rate, but have equity in their home and want to make home improvements, remodel or use the money for other uses, can use a home equity loan or home equity line of credit as valuable resources.
For homeowners who are feeling left out due to being unable to find a new home within their price range, or being outbid multiple times despite the ability to sell their current home for well above its previous value, refinancing their current home is a great option.
Here are a few reasons why:
Rates Are Still Very Low - a lower rate and monthly payment can boost your savings to the point where you can be ready for when the market eventually settles. A recent elimination of a refinance fee charged by the Federal Housing Finance Agency, made effective August 1, may enable you to get a much better rate than what you are currently paying.
You Can Refinance to Renovate - a mortgage refinance can free up cash to receive a lump sum for a renovation that meets your current living needs. A trusted mortgage advisor can help you look at different options that may work best for you. For major renovation projects, a Home Equity Line of Credit or Home Equity Loan can be valuable.
You Might Be Better Off Pocketing Your Extra Cash For Now - with the combination of low rates, low inventory and bidding wars driving sale prices through the roof, holding onto your extra cash allows the ability to refinance your current home and start adding to those reserves for later.
All of these options will allow homeowners and potential homebuyers to financially position themselves favorably to compete for homes when inventory levels start rising again.