Should You Get a Cash-Out Refinance, a 401k Loan, or an Equity Sharing Agreement?
When it comes to funding your home purchase, there are a lot of options to choose from. Cash-out refinance, 401k loan, or equity sharing agreement are just a few of the possibilities. So, how do you know which one is right for you?
Here are a few things to consider when making your decision:
-With a cash-out refinance, you will be taking out a new mortgage on your home for more than what you currently owe. The difference will be given to you in cash.
-This can be a good option if you have equity in your home and you need a large sum of cash.
-However, you will be starting over with a new mortgage, which means new interest charges and potentially a higher monthly payment.
-With a 401k loan, you will be borrowing money from your retirement account.
-This can be a good option if you need a small amount of cash and you don’t want to take on any new debt.
-However, you will have to pay the loan back with interest, and if you leave your job, you may have to repay the loan immediately.
Equity Sharing Agreement:
-With an equity sharing agreement, you will be selling a portion of your home’s equity to an investor.
-This can be a good option if you need cash but you don’t want to take on any new debt.
-However, you will be giving up a portion of your home’s equity, and you will have to continue making monthly payments.
So, which option is right for you? It depends on your individual circumstances. Talk to your financial advisor to see which one makes the most sense for you.