Should I Refinance a House at a Higher Rate?

by Ravipal Atwal
Refinance At Higher Rate

Interest went up so quickly and a lot of people felt the pinch of higher mortgage payments and some of us were planning to cash out or refinance their homes and were a bit confused about their best way to move forward?

Question: it is wise to refinance at a higher rate and get an equity line of credit from the current mortgage?

I will definitely set up a Home Equity line of credit regardless, It’s always lower interest rate compared to any other product and it can be used for any emergency or investment. If you don’t use it, there is no expense or charges.

Now, let’s talk about refinancing, about being good or bad, It depends what you want to do with that money.

First thing to consider, can you make extra payments for the money cashed out? If it’s making things difficult then don’t do this.

Secondly, How will you use this money? 

  • If you need cash for another investment or emergency and If you have to make a choice between Selling your home vs refinancing, then I would  go with the refinancing. Even at higher interest rates, in this case refinancing is better because we lose too much money in commissions when we sell.
  • It’s a GOOD idea if you can invest in a business which gives you higher returns, I recently took out $300K from my property and bought a business with returns over 25% and my refinancing interest rate is still much lower. I will share details about this in a video.
  • It’s a GOOD idea if you want to pay off high interest rate credit card debt. Credit cards interest rates are over 20% and Home equity at today’s rate is still cheaper, So it’s a good idea in this case.
  • It’s a GOOD idea if you need a car and home equity is always cheaper than Car loans. But remember, I am not recommended to go out and buy a luxury car which you don’t actually need. It’s something of necessity, if a new or used car is your need right now, it’s not a bad idea to use Home equity LOC. Especially, when you are buying a used car, for new cars, sometimes you get a good deal at a low interest rate.
  • It’s a GOOD idea if you can use that to buy more real estate (only good deals with positive cash flow). I would do this if I find some deals to buy. But it’s not a good time to do it right now, but there may be time in a few months or years to do this. Keep an eye. So, have your Home equity LOC approved and use it when it’s the right time.
  • It’s NOT a good idea if you want to do some unwanted renovation in your house like a stone driveway, or want to pay for a trip.
  • It’s NOT a good idea if you want to take money out to invest in STOCKS and CRYPTO. These things have worked for some people but it’s very risky.

I hope this article helps you to make better decisions, If you like this it, please don’t forget to LIKE and COMMENT.

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