When you refinance the entire value, 100%, of your house, you are essentially taking all the value out of property. This procedure costs money. Typically, you will be required to pay about 3% of your home's total value to cover the closing costs. You may also need private mortgage insurance, because all of your home's equity is used up. However, if you work with a sub-prime lender, the insurance needs may be waived. Refinancing also bestows some tax benefits, such as deducting interest and closing costs.
A full 100% refinance costs more than the typical refinancing, because you are borrowing against the entire value of your property and home. Before going with the first refinancing institution you find, do some research. There are plenty of websites where lenders compete for your home, and you can read the terms and conditions for this refinancing. Before applying, be sure to know the rough estimate of your home, along with your credit score and level of debt. This will make all the quotes more realistic.
Another option to hiring one mortgage firm to refinance 100% of your equity is to get two or more mortgage firms to refinance parts of your property value. This allows you to forego private mortgage insurance, which costs several hundred a year, and helps with the structuring of your mortgage costs. You can get a fixed loan and an adjustable, to help you pay the mortgage off. Not only that, but you will be able to take advantage of different features offered by different mortgage firms.
For people who need a lot of money and fast, refinancing and cashing out all of your equity is the best and only way to get it. Some of the reasons you may need this money is for your child's college tuition, purchasing more property or investing, paying off standing debts or getting home repairs.
Since you can lose your house if you default on any payment, be sure to read the terms and conditions carefully, and ensure that you can pay the money back each month. Remember, a 100% refinance has higher payments than a regular refinancing loan, and if you are already having credit card or money troubles, refinancing this much of your equity may be a bad idea.
Get estimates from mortgage firms and take your income and bills into consideration before going headfirst into signing away all of your property's value.