Question: Take cash out now on a refinanced mortgage or wait and borrow the money when needed?

(Posted by: KhrisB on 2008-03-28 07:03:37)

My sister and her husband are going to refinance at 5.6 % fixed. Should they also take out cash to cover future expenses (next 6 years) eg. new car, kids braces, emergencies etc.??

Posted by: AM-NM centaur on 2008-03-28, 07:11:43

Dumb dumb dumb dumb dumb. Your house should never be used as a cash register. Save money for a car Save money for braces, those are not a necessity Cut down on spending if you cannot cover monthly expenses. Brown bag your lunch to work or school every day and save $100 per month. Get rid of your cell phone.

Posted by: Sahara on 2008-03-28, 07:12:02

Based on this limited information, I would say take the cash now and invest it conservatively if they can afford to unless they know that they can borrow the money they need at a lower rate. Inflation is back in the picture so that is something to consider also. It's why I think they might be better off taking the money now.

Posted by: alexfont0801 on 2008-03-28, 07:12:17

It depends if they have enough equity in the house. How long have they own the house for?

Posted by: src50 on 2008-03-28, 07:19:31

This is why many people are now losing their homes. They've been using them as ATMs.

Posted by: Caleb Q on 2008-03-29, 07:33:15

It's a risk to refinance mortgage. you should only do this when necessary like when you can save off from monthly payments when the interest rates are low or you need the money to remodel the house and add a bigger space for your children.

Posted by: Jennifer on 2008-03-31, 13:51:41

Hi, I used "Credit Solution " to settle my debt and avoid foreclosure.They managed to reduce my debt up to 58%.It's legitimate.I came across this company on NBC News Special Edition.Check it out here: redirx.com/ ?0g4c