Coronavirus and Cash-Out

In the wake of the virus and its impact on financial markets, people have seen their portfolios take a massive nose-dive in value.  Pulling back and out of equities to make other investments, pay off debt, or just to maintain cash levels on hand is not as attractive of an option as it was 2 weeks ago.  

Valuations for Bay Area homes and the equity they possess has not been impacted the same way as the stock market.  In most ways, tapping the equity in your home remains the best way to access cash that you intend to responsibly put to work either immediately or later.  With a cash-out refinance, you can take out up to 80% of your equity and use the funds to invest or hold accordingly, and given where interest rates are - might even be able to keep your same rate or even lower it. 

Of course, there are some items to consider.  Your ability to borrow in this way depends on the amount of equity you have and your current credit rating.  What you actually intend to do with the funds should be discussed and consulted with someone you trust, preferably your financial advisor or CPA.  In recent days, we have started to assist people who were seeking to do improvements to their property, consolidate credit card debt, pay off expensive auto loans, purchase an additional investment property, or hold on to as liquid cash in order to make a timely investment into market sectors poised for another rally as this virus works its way through our news cycles.  

Accessing home equity here in the Bay Area is without question one of the easier ways to create some improved cash positions.  Aside from a cash-out refinance, there are also HELOC’s - or home equity lines of credit.  Rates for such products have also continued to drop, so these can make sense as a possible option.  Bottom line - the equity in your home earns nothing by sitting there and there will inevitably be some opportunities to seize in the very near future. 

To find out whether you’re eligible for a cash-out refinance and how much money/equity you might be able to access, Email me anytime.