Two broad trends are dominating today’s housing market. First, property values have soared to all-time highs. And second, interest rates are rising.
Those two realities mean there’s ample opportunity for homeowners to save money by taking cash from their homes and using it to consolidate debt. That cash can also be used for any much-needed home improvements or even a long-awaited vacation. While traditional rate-and-term financing is fading fast, cash-out refinancing remains compelling.
That’s partly because of skyrocketing home values. Prices are up nationally 15% to 20% in the past year, depending on the index you watch. Average values are up more than 30% since the beginning of the pandemic. That sharp rise in home prices means borrowers have untapped equity in their homes.
The other factor is that interest rates are rising sharply. As the Federal Reserve goes to war against inflation, the cost of variable-rate debt is rising. Market watchers expect the Fed to raise rates aggressively and repeatedly in 2022. Mortgage rates already have risen sharply in 2022, but mortgage financing remains the cheapest debt available. So, even after mortgage rates have risen, there can be a good case for a homeowner to do a cash-out refi to consolidate credit card debt, personal loans, medical bills, or other types of debt that are more expensive than mortgage debt.
You can help borrowers consolidate debt by tapping into their equity with LendSure’s Cash-out Refinance Program. Your LendSure Account Executive can help you refill your pipeline by providing cash-out loan options across a number of programs.
A cash-out refi, of course, lets the borrower walk away with money at the closing table, while still keeping the monthly principal and interest within a financially comfortable range. Given the historically hot housing market, cash-out refi’s are gaining momentum.
LendSure applies the same commonsense approach to cash-out refi’s that we use with other types of loans. We’re not beholden to agency rules, and we don’t have to say “no” because the loan is outside the box. Instead, we try hard to say “yes” to borrowers in scenarios that would cause other lenders to say “no”.
Among the highlights of LendSure’s program:
- Cash-out is available across most loan programs, including 12- and 24-Month Bank Statement
- Cash-out can be applied to reserves (if Super Prime or Expanded Approval, must be <70% LTV and >700 FICO)
- Available for non-warrantable condos
- LendSure considers exceptions to cash-out limits based on the borrower’s overall profile.
Contact your LendSure Account Executive to talk through your borrower’s loan scenario today.