Cash-out for College
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As families prepare for time together over the holidays, they may be thinking about college for their soon to be graduated high-school student. There are several options for financing a college education that may include utilizing equity in your home while rates are historically low.
Refinance with Cash-out
It is common to refinance and take equity out of your home in the form of cash-out. Interest rates are at all time lows and it’s still a great time and opportunity to utilize equity to invest in your child’s college plans. Some highlights of refinancing with cash out include the following:
Accepting current low rates and historically high values. Your loan to value ratio, credit score, and debt-to-income ratio will all factor into the interest rate.
Possible tax advantages. There may be tax advantages to utilizing the equity in your property to fund college tuition and other expenses such as housing and books. Consult with your Certified Financial Planner or Certified Public Accountant on your scenario.
Assisting your student navigate the books with less financial stress from student loans. Comparing current student loan interest rates and 30-year fixed mortgage rates to fact check the pros and cons may be worth the effort, especially as interest rates are very low.
Home Equity Line of Credit
Some advantages to a Home Equity Line of Credit (HELOC) include the following:
Only pay on what you use. Not sure how much tuition, books, and housing will cost? A Home Equity Line of Credit allows you to only pay on what you use.
Access to your HELOC with checks, debit card, and cash-advances in the bank branch or online.
With appraised values higher in most neighborhoods throughout the nation, taking out equity has never been easier and interest rates lower. Maximizing equity to fund college, may be the best option while it’s still available.
Consult our mortgage team on how these options may best serve you and your family. Contact us on the confidential form below.