You must first determine if you have enough equity in your home. For your primary residence, it is a common guideline that the maximum loan amount relative to the value of your home is 80 percent. For example, if you owe $100,000 and your home is appraised for $200,000, you may be able to get approximately $60,000 in cash through refinancing. For second homes or investment properties, the maximum loan-to-value is typically lower than 80 percent. Consult your lender for specifics. If there’s not enough equity for a cash out refinance, a home equity line of credit might be the better solution.
Ray Batalona, BECU Mortgage Advisor, 425-609-5481.