My parents recently suggested I refinance my home to help with some of my debt, but how does that help/work?
I bought my house in 2020 for roughly 275,000 its current market value is close to 400,000. From my understanding I can use the difference in value to help pay for the loan, but how exactly does that work? And how do I go about it?
In: Economics
Approach a bank.
Let’s say when you bought it for 275k with a mortgage of 200k and deposit of 75k
That’s a loan of 73% of the value.
You might now be able to get revalued and get a mortgage of 220k which 55% of the value. The bank is still happy, because they know that if you default they’ll be able to get their money back by selling.
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