The Pros and Cons of a Cash-Out Refinance, a Reverse Mortgage, and Selling Property Outright
When it comes to deciding what to do with your home equity, you have a few options. You can take out a cash-out refinance, get a reverse mortgage, or sell the property outright. Each option has its own set of pros and cons that you need to consider before making a decision.
A cash-out refinance allows you to tap into your home equity and get cash in hand. This can be used for any purpose, such as home improvements or debt consolidation. The biggest pro of a cash-out refinance is that you can get a lower interest rate than you would with a home equity loan or HELOC. The biggest con is that you’re putting your home at risk if you can’t make the payments.
A reverse mortgage is a loan that allows you to tap into your home equity and not make any payments until you sell the home or die. The biggest pro of a reverse mortgage is that you don’t have to make any payments as long as you live in the home. The biggest con is that the interest rate is typically higher than a traditional mortgage, and you may not have enough equity in your home to qualify.
Selling your property outright is another option to consider. The biggest pro of selling is that you’ll have the most cash in hand. The biggest con is that you’ll have to find another place to live.