If you’re in search of money, don’t forget to look at the equity in your home.
It may be the best and most efficient way to secure the funds you need for a home renovation, to start a business, or to travel the world.
Before you do anything, it’s important to learn more about the finer details of a cash-out refinance in South Carolina. This will help you decide, with confidence, if it makes sense to take action.
A cash-out refinance allows you to borrow more than your existing loan amount and accept the difference in cash.
Once you’re provided with this lump sum, which is generally wired directly to your bank account, you can use it however you wish.Skip ahead: Get started with your refinance.
How to use the funds from a cash-out refinance in SC
You don’t want to apply for a cash-out refinance until you have a clear plan of how you’ll use the money. There’s no shortage of options, with the following among the most common.
1. Debt consolidation
Once you know how much money you qualify to borrow, turn your attention to the types of debt you can consolidate. Look at things such as:
- Credit cards
- Personal loans
- Home equity loans
- Home equity lines of credit
By consolidating your debt, you make it easier to manage your finances. It can also help to increase your credit score by reducing the amount of debt that you’re carrying.
2. Home renovation
There are many ways to pay for a home renovation, with the funds from a cash-out refinance among the best. It’s an affordable way to access the money you need to complete a project such as a kitchen or a bathroom renovation.
For example, if your child is getting married, you may want to contribute to the cost of the wedding. Unless you have enough cash on hand, this form of refinancing may be the best option. You can also use the funds to pay for your child’s honeymoon or to assist them with the purchase of their first home.
4. Start a business
Did you know that start-up and first-year costs of a business are generally in the $30,000 range? That’s a lot of money. If you don’t have it on hand, a cash-out refinance is often the best way to get the funds you need in short order.
5. Continuing education
Invest in yourself by advancing your education. Take college courses in person or online with the funds received from a cash-out refinance. You can also use the money for educational expenses like books and supplies.
Reasons to apply for a cash-out refinance in South Carolina
Now that you know how to use a cash-out refinance, let’s turn our attention to some of the benefits.
Lower interest rate
Compare your current interest rate to the rate that you qualify for.
If there’s a difference, calculate how much savings you’ll accumulate over the term of your new loan. It could be well into the thousands of dollars.
Credit score boost
A cash-out refinance provides you funds to pay off and/or consolidate debt. This has the potential to boost your credit score, which improves your financial life in many other ways.
Tax deductible interest
Your tax professional can talk to you about whether you can deduct mortgage interest payments. If you’re eligible, it’s one of the easiest ways to reduce your annual tax liability.
An example of a cash-out refinance
It’s easier to decide for or against a cash-out refinance with real-world numbers.
Let’s assume that your home has an assessed value of $350,000 with a balance of $150,000. You could get up to $130,000 cash out.
Tip: Most lenders allow you to borrow up to 80% of your home’s assessed value.
South Carolina facts and figures
- Charleston is the largest city in South Carolina.
- South Carolina covers a total area of 32,020 square miles.
- South Carolina is the 40th largest state by area.
- With a population of approximately 5,190,705 people, South Carolina is the 23rd most populous state in the United States.
Keep in mind that your location within the state doesn’t matter. As long as you have equity in your home, you can apply for a cash-out refinance.Refinance in South Carolina today.
The South Carolina real estate market
Much like the majority of the country, home prices in South Carolina are on the rise. According to Redfin, home prices in South Carolina increased 12.6% year-over-year in October 2022.
Now’s the time to learn more about the value of your home. It may be worth more than you think. When combined with the principal you’ve paid down, you could be in a position to borrow more money through a cash-out refinance than you thought possible.
AAA Banking can help
A cash-out refinance in South Carolina doesn’t have to be a complex, time-consuming process.
At AAA Banking, it’s our goal to show you the way from start to finish. Our experienced loan officers are ready to answer your questions, provide guidance, and help you overcome any challenges that arise.
In addition to cash-out refinance loans, we can also help you secure the first loan on a new home. And speaking of new homes, we’ve partnered with HomeScout to assist you with the home search process.
Apply online today, or call us at (844) 897-2265 M-F; 8-8 EST. Either way, one of our experienced loan officers is standing by to provide you with the service you deserve.
Photo by Liza Summer