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Peter Thompson 2626 Warrenville Road Downers Grove, IL 60515 Direct Line: (630) 598-2375 Cell Phone: (630) 479-6424 |
PeterT@promortgagepartners.com
Free refinance Guide – Avoid the mistakes that can cost you thousands
Questions? Whether purchasing a new home or refinancing, let me know how I can help.
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Your privacy is important to me. Your information will not be shared, sold or exchanged with anyone else and I will contact you personally by phone or email.
Illinois Residential Mortgage Licensee #5814
Cash out and debt consolidation refinances
If you have owned your home for a while, chances are that it is worth
much more than what you originally paid. This means you have built up
equity, and if you are like most people, the equity in your home may be
your biggest asset, or source of wealth. If it makes sense, you can tap
into this equity through what is called a cash-out refinance.
Whether this makes sense or not depends on your financial situation, and
what you are planning on doing with the money. By taking out some of your
equity in cash, you are increasing your mortgage and your monthly payment.
This can make sense if you are using the cash to better your financial
situation or improving you r property, but if you are using it to take
a vacation, buy more stuff which won’t go up in value, or other
short term uses, you may regret your decision.
Let’s look at some ways that refinancing can make sense. What is
your over-all debt
level? Are you feeling pressure making all the payment on your credit
cards and other consumer debt? If this is your case, the equity in your
home may be a tool to restructure your debt and give you a fresh start.
For example, I recently helped out a homeowner who had lost his job and,
without much in savings, lived off his credit cards for nearly six months.
He ended up getting a new job in his field, but now he was saddled with
a ton of debt. He did however, have a home he had bought years earlier
with a good deal of equity built up. We refinanced the home, combining
all his debts with the old mortgage into one new larger mortgage. By lowering
the interest rates and extending the new loan over 30 years, the new mortgage
reduced his total payments by more than $500 per month. In this case it
was just what he needed for a fresh start.
There is a danger in this strategy. First, you are paying the loan over
a long period of time, so you are paying interest on the interest. But
the bigger problem is that it is too easy to get back in the same trouble
if you don’t change your credit habits. I’ve seen too many
people who used a cash-out refinance to consolidate their debts and get
a new start, only to run up their credit cards and get right back in debt.
For a long term solution you need to be able to change your outlook and
credit habits.
Other good uses of you equity can be to put on an addition which will
increase your enjoyment and the value of your home, or maybe you have
a business opportunity where the equity can be put to better use.
Any time you take out a loan against the equity in your home, you are
trading some security for the cash you need, but in the right
situation it can be a great way to go.
Testimonials
- “I felt he went above and beyond his job. Very satisfied."
Terry S.
Chicago, IL - "This was my first mortgage and he held my hand all the way. It was a great experience."
Rosaria A.
New Lenox, IL - “Pete Thompson was extremely helpful. He was honest and service oriented. After reading his homebuyer’s guide, I knew what to expect. We will definitely use Pete again, and refer him to all our friends.”
Wayne and Beth B.
Lemont, IL - “Pete Thompson understands our needs. He answered all our questions and made the loan process simple and easy. He was great.”
Bob and Sherry R.
Chicago, IL - "Pete Thompson was great! Helpful, friendly, he went out of his way to make us feel good. I've already passed his name on to my brother, and recommended him strongly."
Jason W.
Chicago, IL - "Pete made everything so easy. We'd heard horror stories from friends who had bought earlier, but it all went great. He made it effortless on our part."
Dan and Sherrie P.
Wheaton, IL - "Pete Thompson was very helpful and informative. I was very happy with the services I received. As a first time buyer with no money down I didn't know what to expect."
Mike B.
Oswego, IL - “Pete was extremely helpful. We felt very confident with his expertise and information. Everything went very smoothly.”
Mike and Monica A.
Glen Ellyn, IL - “An outstanding professional! Pete is the best!”
Daniel and Peg O.
West Chicago, IL - “Pete Thompson was great! Helpful, friendly, he went out of his way to make us feel good.”
Kathy N.
Winfield, IL - “Very nice to work with. Very efficient service.”
Harry and Mary S.
Naperville, IL - “Pete handled the entire process with the professionalism and courtesy I try to show clients in my business.”
Cynthia B.
Chicago, IL - “I knew what to expect upfront, and everything happened just as Pete said it would. A great experience.”
Nick P.
Bloomingdale, IL - “Pete was efficient, thorough, enthusiastic, informative, responsive and proactive in all our dealings with him. It was an honor to work with him.”
Mark and Daphnee M.
Naperville, IL - “Everything was totally professional and seamless – greatly appreciated.”
Richard and Jeanie S.
Huntley, IL - “Pete Thompson made my financing end of buying a home far less stressful than in the past using other mortgage companies. Thank you, Pete.”
Jerry P.
Bloomingdale, IL - “I relocate regularly, and have bought several homes in the past. The level of service I received from Pete and his team was second to none!”
Roman S.
Oak Lawn, IL - “The service was very good and it was a pleasure working with you. I am sure we will be in touch in the future.”
Ron and Lisa S.
Naperville, IL - “I was not sure what to expect, but everything went so smooth it was surprisingly easy. Having the information upfront really made a difference.”
John T.
LaGrange, IL - “We counted on Pete to take care of everything because we lived in Wisconsin. It couldn’t have been handled better.”
Robert and Karen H.
Lombard, IL - “Excellent service. Pete was a pleasure to work with.”
Kent S. and Edward.
Chicago, IL
