Yes, he can get a refinance and cash out with a fixed rate.
Thanks for the reply. What kind of mortgage can he get in such case? Is it HELOC? As far as I know, HELOC is variable rate though...
Let look at an example where a home owner wishes to get $100,000 cash-out of their home:
Home value: $500,000
Existing liens: $300,000 (fancy way of saying current loan balance)
Equity: $200,000
In the above example the home owner has an existing mortgage of $300,000. The home is worth $500,000, so the home owner has $200,000 worth of equity. In other words, the home owner essentially owns $200,000 worth of their home, or 40% of the current property value. If the home owner wishes to tap into that equity, they can execute a cash-out refinance.
Fixed Rate HELOC pros and cons.People are always trapped in one or more emergency situations.At such situations,cash becomes a must.Opting for the home equity line of credit would be a much better idea to get cash continuously rather than other short term solutions.This is because since you are using the equity on your home to get the money,it is going to be given immediately without too much thought by the lenders.The heloc is just like a credit card wherein you are using the equity to get money from the lender.Heloc is of two types:fixed rate and the adjustable rate.
Home value: $500,000
Existing liens: $300,000 (fancy way of saying current loan balance)
Equity: $200,000
In the above example the home owner has an existing mortgage of $300,000. The home is worth $500,000, so the home owner has $200,000 worth of equity. In other words, the home owner essentially owns $200,000 worth of their home, or 40% of the current property value. If the home owner wishes to tap into that equity, they can execute a cash-out refinance.
Fixed Rate HELOC pros and cons.People are always trapped in one or more emergency situations.At such situations,cash becomes a must.Opting for the home equity line of credit would be a much better idea to get cash continuously rather than other short term solutions.This is because since you are using the equity on your home to get the money,it is going to be given immediately without too much thought by the lenders.The heloc is just like a credit card wherein you are using the equity to get money from the lender.Heloc is of two types:fixed rate and the adjustable rate.
Hi Jing,
You friend can apply for a fixed rate mortgage for a 15 year or a 30 year term. Depending upon his credit report and financial situation, he would qualify for a loan. Your friend should speak to the local lenders in order to get pre-approved for a loan. This community, too, has a large number of lenders. Your friend can seek a no obligation free mortgage consultation from them and get to know what type of rates and terms he would get.
You friend can apply for a fixed rate mortgage for a 15 year or a 30 year term. Depending upon his credit report and financial situation, he would qualify for a loan. Your friend should speak to the local lenders in order to get pre-approved for a loan. This community, too, has a large number of lenders. Your friend can seek a no obligation free mortgage consultation from them and get to know what type of rates and terms he would get.