Basics of Property Management: Screening Potential Tenants
3 Things To Consider Before Applying For A Cash Out Refinance To Pay Off Debt
Jesse Obrien
If you've lived in your home for at least five years, you may have some equity built up in it that you could access for paying off the credit card debt you have. Before you do this, there are several things you will need to consider, and here are three of the most important considerations to look into.
How much equity do you have?
You can refinance your home and take out cash from the equity, but you may only have access to part of this equity. In most cases, borrowers can access around 80%, or maybe 90%, of the value of the home. If you want to refinance to get cash out to pay off debt, you will need to make sure that you have enough equity to accomplish this.
If you are not sure how much your house is worth, get an appraisal on it. An appraisal will be needed if you decide to go through with the refinance, and you could supply the lender with your recent appraisal, which means you will only have to pay for it once.
What are the interest rates on your credit cards?
A second thing to consider is whether or not it would make sense to borrow money against your home to pay off your credit card debts. You can find the answer to this by looking at the interest rates of your credit cards. If every credit card you have has a 0% interest rate, it probably wouldn't make sense to refinance because the interest rate on the loan will be higher than 0%.
If the rates are much higher than current interest rates, you could save a lot of money if you refinance. You might also be able to reduce your monthly expenses through refinancing because lower interest rates yield lower monthly payments.
Will you qualify?
Finally, you should check your credit report to make sure that your credit is good enough to qualify for a low interest rate on your loan. If your credit score is lower than 700, you might not qualify for the best interest rate.
If your score isn't as high as it needs to be, you may want to wait a few months before applying for a refinance. These extra months may give you enough time to improve your credit score.
If you are ready to refinance your home loan and would like to get cash out to pay off your debts, visit a lender today that offers home loans.
For more information, contact Liberty Escrow Inc. or a similar company.
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For the last several years, I've used a property management firm to help with my rental properties. One of the tasks that they handle for me is screening applicants who would like to move into one of my vacant units. Their expertise has helped me lower my tenant turnover and find people who want to stay with me for years. Part of the process is a tenant screening credit check. Before any further contact takes place, my manager orders credit reports from at least two agencies. That is enough to tell us if an applicant is a good financial risk. Assuming the references work out, I meet the candidate and make the final decision. If you own rental properties, let me tell you more about the benefits of having a property manager. I'm betting you'll find this type of arrangement will work for you too.