Coming at you with some information on Cash-Out Refinance! Look, we have got to be careful here, on this topic I am going to do a whole series on this but…
The first thing I want to impress upon people is we have to be very careful to not fall into the trap of using our home’s equity as an ATM machine…
Lots of people did that 2001, 2002, 2003, 2004, 2005, And lots of those people lost their homes in 2008, 2009, 2010, 2011. Let’s not put ourselves in that position, we have to be careful
Please watch all the videos in this series and I will break it down for you, but the first thing I want to help you understand is this;
Talking about Debt Consolidation and How to run the numbers
It’s a pretty simple thing we have to look at. We have to look at, how much we increase in the payments for mortgage and for how long a period of time. There are two methodologies for this: Spreadsheet vs Livability. The spreadsheet is simple, we run the numbers, we are eliminating this much per month in debt by paying it off, we are increasing your mortgage. The difference between the two is your monthly gain & the trick of that is what are you going to do with that money.
If you are going to do a refinance, say $300/month, and waste $300 on restaurants, I’ve got to be honest.. Don’t waste your time. That’s using your house as an ATM. Better, let’s take that $300/month and do something smart with it. Maybe pay off more debt, maybe invest it, or save it for the future. But that’s an important thing, so that is the spreadsheet method.
The livability method is a bigger piece. I’ve been in situations in my personal life where eliminating $200 – $300/month in my cash out literally makes a difference in the quality of my life
And if that’s the case … DO IT!
We have to have a conversation about the long term impact of that, but we have to make sure that the day to day …look..life is too short we have to keep our stress level low and manageable and I see a lot of people, buying stupid crap that they don’t need. Please don’t be offended if I just said you buy “stupid crap”, but you might have bought “stupid crap” if that offended you, just a thought, I’ve bought “stupid crap” it happens to all of us.
Anyway… Look we have got to run the numbers, spreadsheet, livability, that’s the way to do it.
If you have any questions about your specific situation, reach out to me. One of the videos that talk about how I could run those numbers without actually pulling your credit I hope I can catch you on that video. If not reach out to me, I’m here to help!
Scott DiGregorio, Your Mortgage Guy
I will talk with you soon, byebye!
