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
Unless this is credit card debt your parents are morons.
ELI5: Essentially you are redoing the mortgage in a very similar (slightly less complicated) fashion to when you bought the house but since the house is now worth more you could potentially borrow more. There are going to be thousands in fees, you will not get an interest rate anywhere close to your 2020 rate (ie owe 100k+ more over the life of the loan), have significantly higher monthly payments and tack on an additional four years to pay off if you’re making minimum payments.
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