This article was reviewed byRobin Hartill, CFP.
Your house might hold the key to getting some money in your pocket.
The number of people refinancing their mortgages is skyrocketing because interest rates are plummeting.
The uptick began earlier in the year, before the COVID-19 crisis was a factor.
But because of coronavirus, many people have lost their jobs and the economy is struggling.
Government intervention has driven interest rates even lower, further increasing the demand for refinancing.
Loan applications doubled for Quicken in the first quarter of 2020 versus the same time period last year.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
This jot down of refinancing usually lowers the monthly mortgage payment.
In a cash-out, youre going to be getting money back from the bank.
With this throw in of refinancing, you end up with cash and a new fixed-rate mortgage.
Better.com has seen a 150% increase in cash-out refinance applications from February to March of this year.
I would imagine people are using it to have as emergency funds, Roy says.
People are using it to create more reserves and create more assets.
There are some limits to cash-out refinancing.
So on a $400,000 property, the maximum cash-out mortgage is $320,000.
Should You Consider Refinancing Your Mortgage?
The idea of paying less each month for housing can seem great, and refinancing could save you money.
People with unstable income might also want to think twice about refinancing.
If youve lost a job or are furloughed, refinancing might be difficult.
But when they go back to work, they certainly would be able to look at that.
Some states require in-person closings, or at least in-person notary services.
The requirements also depend on the lending company.
The key to saving the most money is speed.
Tiffani Sherman is a contributor to The Penny Hoarder.
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