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Recent News and Articles on the Keywords: cash out + refinance + refinancing  Related to the article below (Last Update: 8/4/2008)

City running short of time to refinance debt Pittsburgh Tribune-Review, PA - By Jeremy Boren Time is running out for Pittsburgh to cash in on refinancing some of its debt, budget officials said Monday. Unusually high insurance quotes ... THE MOST COMMON PROBLEMS UNDERWRITING A LOAN APPLICATION American Chronicle, CA - Aug 3, 2008 1003 fails to indicate whether the property is a purchase or refinance. White out used on the 1003. (This is strictly a no-no) Cash-Out Refinance Share in First Half of 2008 Lowest in Three Years Originator Times - Jul 28, 2008 "During the second quarter about $38 billion in home equity was cashed out through refinance of conventional loans made to prime borrowers, ...FRE Sirius: JP Morgan Sees Near-Term ?Struggle? For Shrs Barron's Blogs - ?We expect the company to be able to refinance as the business should be stronger and credit markets hopefully no worse that recent days when XM refinanced ...LON:JMI - XMSR RTT News SBA Communications Corp. Q2 2008 Earnings Call Transcript Seeking Alpha, NY - Based on where we expect leverage to be at that time if the markets were exactly the same as they are today, we believe we could refinance our 2010 ... PRIMUS Telecommunications Reports Second Quarter 2008 Financial ... CNNMoney.com Eclipsys Corporation Q2 2008 Earnings Call Transcript Seeking Alpha all 871 news articles »  ECLP - SBAC - OTC:PRTL Boston Globe Car manufacturer negotiates $30bn refinancing deal Emirates Business 24/7, United Arab Emirates - Aug 3, 2008 Kolka said Chrysler Financial, the automaker's financing affiliate, was nearing completion of a deal to refinance about $30bn in debt backed by auto loans ... Chrysler's $US30b refinancing on track The Age all 176 news articles » Meruelo gets loan LA Observed, CA - ... more cash, given a laundry list of upcoming expenses, [analyst Alex] Goldfarb said. "There are loans that are maturing that need to be refinanced. ... `Leveraged Bailout' Won't End Mortgage Madness: John F. Wasik Bloomberg - ``Cash-out'' corridors in Arizona, Florida, Michigan, Nevada and Ohio are stung because homeowners can't refinance. They have little or no equity and poor ... Allentown Morning Call Boscov's files for Chapter 11 Philadelphia Inquirer, PA - Boscov's tried to assuage suppliers in March by announcing it had refinanced some debt, freeing up additional cash. "I would say creditors saw that as a ... Boscov?s files for bankruptcy protection Philadelphia Inquirer all 296 news articles » Job cuts loom in Suncorp's stormy outlook The Age, Australia - A well-capitalised buyer such as these private equiteers could refinance the assets and access cheaper funding. And it is unlikely the bidders have fired ...

Cash-out refinance can make sense

I am thinking of refinancing my home. I owe $64,000 and the home is worth about $265,000. My current interest rate is 6.625 percent. I wanted to get cash out and also pay off my car loans. I plan to borrow $140,000 at 5.84 percent. Do you think this is a good idea?
Thank you,
-- Mike Mortgages

Article continues below and (thank you)

A lower interest rate on the loan, combined with potentially being able to use the mortgage interest expense, can make mortgage debt an attractive alternative to staying in your car loans. The IRS, in Publication 936, Home Mortgage Interest Deduction, has a flowchart that walks you through the decision variables that determine if your mortgage interest is fully deductible.

I'm a little perplexed as to how you will get a 30-year, fixed-rate mortgage at an interest rate below 6 percent when Bankrate's national average is 6.32 percent, but you didn't state that you're looking at a conventional 30-year mortgage. If you're looking at an option ARM or some other type of variable rate product, then you're taking on some interest-rate risk in refinancing and you have to be willing to accept that risk.

You didn't say how much of the cash out was going toward paying down the car loans and how much was going for other things. Replacing your car loans with a mortgage loan just restructures your debt; you're not taking on additional debt or paying it off either -- you're just moving it. Make sure there's no prepayment penalty on the car loans before taking this step.

Taking 30 years to finance a car might not make sense, but you can rationalize that the payments in the early years are used to pay off the cars and it's the later payments that go toward paying off the house.

Like any refinancing, how long you plan to be in the house influences whether it makes sense to do the refinancing. If you're not in it for the long haul, then the closing costs outweigh the potential interest savings and tax deductions.

Bankrate's refinancing calculator can help you decide on the refi portion of the loan. The cash-out option depends on the interest rate and remaining term of your car loan. Use Bankrate's interactive work sheet, "Can you borrow from your home equity?" to see if tapping your home equity for the cash-out refinancing makes sense with your current finances.