Don't Take Out To Much Equity
Hello little piggy bank!! If you are a homeowner and you're paying attention to the current housing market then you may be looking at your home with big animated dollar signs popping out of your eyes.
The housing market is leading to a lot of homeowners refinancing their homes and pocketing some of their homes equity. Seems like easy money doesn't it? Well, Freddie Mac is warning people to slow down and think a little harder about this decision. "In 2020, about $185 billion of equity was taken out through cash-out refinances – the highest amount since 2007" according to Fannie Mae and Freddie Mac.
Cash-out refinances make a lot of sense for homeowners that need some quick cash to cover medical bills or other long term investments like college or renovation. Sounds like a no-harm, no-foul situation. However there is one big thing to consider. When the market is crazy, like it is right now, and the home prices continue to rise, like they are right now, homeowners run the risk of the their home value falling below their home loans actual value.
Thanks to stricter lending laws, lenders and homeowners are also being more cautious: "36% of 2020 cash-out refinances resulted in a mortgage balance 5% or greater than the previous balance. From 2005 to 2008, it was 78%." according to Fannie Mae and Freddie Mac.
Overall, homeowners considering a cash-out refinance need to recognize the importance of not missing payments and to be aware that refinancing still costs money. Closing costs could make up 2% to 5% of the loan amount.
Source: “Tempted to Turn Your Home’s Soaring Equity Into Cash? Don’t Do it Lightly: Fannie Mae Chair,” Yahoo! Money (June 26, 2021)
The housing market is leading to a lot of homeowners refinancing their homes and pocketing some of their homes equity. Seems like easy money doesn't it? Well, Freddie Mac is warning people to slow down and think a little harder about this decision. "In 2020, about $185 billion of equity was taken out through cash-out refinances – the highest amount since 2007" according to Fannie Mae and Freddie Mac.
Cash-out refinances make a lot of sense for homeowners that need some quick cash to cover medical bills or other long term investments like college or renovation. Sounds like a no-harm, no-foul situation. However there is one big thing to consider. When the market is crazy, like it is right now, and the home prices continue to rise, like they are right now, homeowners run the risk of the their home value falling below their home loans actual value.
Thanks to stricter lending laws, lenders and homeowners are also being more cautious: "36% of 2020 cash-out refinances resulted in a mortgage balance 5% or greater than the previous balance. From 2005 to 2008, it was 78%." according to Fannie Mae and Freddie Mac.
Overall, homeowners considering a cash-out refinance need to recognize the importance of not missing payments and to be aware that refinancing still costs money. Closing costs could make up 2% to 5% of the loan amount.
Source: “Tempted to Turn Your Home’s Soaring Equity Into Cash? Don’t Do it Lightly: Fannie Mae Chair,” Yahoo! Money (June 26, 2021)
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Jennifer Springer Rinden
BROKER | BB3239152,B3502427
Jennifer Springer Rinden
BROKER | BB3239152,B3502427
After spearheading the marketing divisions of several major corporations, Jennifer transitioned her focus to Southwest Florida real estate. As the Broker of Orchid Realty International, she brings her expertise in business development and strategic marketing to leading her team.
Consistently recognized with achievement awards for top performance by the company and Bonita Estero Board of Realtors, you can expect a unique experience when you work with Jennifer and her selectively curated team of real estate marketing and customer service professionals. Orchid’s platinum-level client service and results-driven strategic Media Marketing approach are the realization of Jennifer’s vision to refine the way real estate is transacted.
Intimately involved in the local communities and well versed in each area’s unique features, her preference is a personalized consultative approach to working with buyers and sellers. Carefully she aligns a cohesive targeted strategy for each client designed specifically to meet their real estate goals.
Jennifer earned a Bachelor of Science in Marketing from Northern Arizona University and an MBA with an International Business concentration from the University of Wisconsin. She is associated with the luxury brand Who’s Who in Real Estate and is active in supporting the Fight Against Human Trafficking.
As a golfer and tennis player, Jennifer easily adapted to the Southwest Florida lifestyle after relocating from Appleton, Wisconsin. On her free time, she often strolls along the beach with her five-year-old twin boys and attends concerts with her husband who shares her love of music.
Jennifer is currently ranked as one of the top agents by Bonita Springs-Estero Association of REALTORS and was recently featured in Top Agent Magazine for her innovative marketing techniques, her unwavering commitment to assisting home buyers, and her dedication to helping Southwest Florida homeowners sell their homes for top prices.
Languages – English, Spanish
Consistently recognized with achievement awards for top performance by the company and Bonita Estero Board of Realtors, you can expect a unique experience when you work with Jennifer and her selectively curated team of real estate marketing and customer service professionals. Orchid’s platinum-level client service and results-driven strategic Media Marketing approach are the realization of Jennifer’s vision to refine the way real estate is transacted.
Intimately involved in the local communities and well versed in each area’s unique features, her preference is a personalized consultative approach to working with buyers and sellers. Carefully she aligns a cohesive targeted strategy for each client designed specifically to meet their real estate goals.
Jennifer earned a Bachelor of Science in Marketing from Northern Arizona University and an MBA with an International Business concentration from the University of Wisconsin. She is associated with the luxury brand Who’s Who in Real Estate and is active in supporting the Fight Against Human Trafficking.
As a golfer and tennis player, Jennifer easily adapted to the Southwest Florida lifestyle after relocating from Appleton, Wisconsin. On her free time, she often strolls along the beach with her five-year-old twin boys and attends concerts with her husband who shares her love of music.
Jennifer is currently ranked as one of the top agents by Bonita Springs-Estero Association of REALTORS and was recently featured in Top Agent Magazine for her innovative marketing techniques, her unwavering commitment to assisting home buyers, and her dedication to helping Southwest Florida homeowners sell their homes for top prices.
Languages – English, Spanish
After spearheading the marketing divisions of several major corporations, Jennifer transitioned her focus to Southwest Florida real estate. As the Broker of Orchid Realty International, she brings her expertise in business development and strategic marketing to leading her team.
Consistently recognized with achievement awards for top performance by the company and Bonita Estero Board of Realtors, you can expect a unique experience when you work with Jennifer and her selectively curated team of real estate marketing and customer service professionals. Orchid’s platinum-level client service and results-driven strategic Media Marketing approach are the realization of Jennifer’s vision to refine the way real estate is transacted.
Intimately involved in the local communities and well versed in each area’s unique features, her preference is a personalized consultative approach to working with buyers and sellers. Carefully she aligns a cohesive targeted strategy for each client designed specifically to meet their real estate goals.
Jennifer earned a Bachelor of Science in Marketing from Northern Arizona University and an MBA with an International Business concentration from the University of Wisconsin. She is associated with the luxury brand Who’s Who in Real Estate and is active in supporting the Fight Against Human Trafficking.
As a golfer and tennis player, Jennifer easily adapted to the Southwest Florida lifestyle after relocating from Appleton, Wisconsin. On her free time, she often strolls along the beach with her five-year-old twin boys and attends concerts with her husband who shares her love of music.
Jennifer is currently ranked as one of the top agents by Bonita Springs-Estero Association of REALTORS and was recently featured in Top Agent Magazine for her innovative marketing techniques, her unwavering commitment to assisting home buyers, and her dedication to helping Southwest Florida homeowners sell their homes for top prices.
Languages – English, Spanish
Consistently recognized with achievement awards for top performance by the company and Bonita Estero Board of Realtors, you can expect a unique experience when you work with Jennifer and her selectively curated team of real estate marketing and customer service professionals. Orchid’s platinum-level client service and results-driven strategic Media Marketing approach are the realization of Jennifer’s vision to refine the way real estate is transacted.
Intimately involved in the local communities and well versed in each area’s unique features, her preference is a personalized consultative approach to working with buyers and sellers. Carefully she aligns a cohesive targeted strategy for each client designed specifically to meet their real estate goals.
Jennifer earned a Bachelor of Science in Marketing from Northern Arizona University and an MBA with an International Business concentration from the University of Wisconsin. She is associated with the luxury brand Who’s Who in Real Estate and is active in supporting the Fight Against Human Trafficking.
As a golfer and tennis player, Jennifer easily adapted to the Southwest Florida lifestyle after relocating from Appleton, Wisconsin. On her free time, she often strolls along the beach with her five-year-old twin boys and attends concerts with her husband who shares her love of music.
Jennifer is currently ranked as one of the top agents by Bonita Springs-Estero Association of REALTORS and was recently featured in Top Agent Magazine for her innovative marketing techniques, her unwavering commitment to assisting home buyers, and her dedication to helping Southwest Florida homeowners sell their homes for top prices.
Languages – English, Spanish