Thursday, February 11, 2021

Cash out refinance: How to know if it is time

 

Photo by todd kent on Unsplash

Traditional refinancing entails swapping out your current debt, often a mortgage, for another loan with better terms. For example, many people choose to refinance their homes when housing market interest rates drop so they can pay less money in the long run.

What is a cash-out refinance, though? It’s a little different. Instead of trying to pay less, you borrow more than your house is worth and use the extra money for other debts, purchases, or payments.

How do you know if acquiring funds this way is right for you? If it is, when is the best time to do it? Let’s dive into why people choose to go through this process.


What is a Cash-Out Refinance?

You might use a typical term-and-rate refinance to exchange your mortgage for one with lower monthly payments or another benefit. However, a cash-out refinance means you switch out your mortgage for a larger one. 

Why would anyone want to borrow a bigger mortgage? It’s a way to access the value of your home that you own through a loan instead of selling it. If you have paid off any part of your mortgage, then you have built “equity.” You cannot use your home’s equity to make purchases in illiquid form, so taking out another loan and using your equity as collateral allows you to use that value as cash.


How Does a Cash-Out Refinance Work?

Next, how does a cash-out refinance work? Most lenders limit the amount you can cash out to between 80% and 90% of your property’s equity, so you cannot withdraw as much as you might hope. 

Because you are borrowing against your equity, you need to have accumulated a sufficient amount (in other words, you have paid off a sizable portion of your mortgage). It’s also advisable to keep around (and sometimes required) 15-20% of your equity once the process is complete. For example, if your home is worth $400,000, you could take out another loan worth 80% of your home’s value, which is $320,000. How much money you have left to spend on other things depends on your mortgage balance. If you have $150,000 in equity and $250,000 left to pay, you would have $70,000 left over.


What Can You Use a Cash-Out Refinance For?

How you use your refinance money is up to you. Many people use their new cash to pay for: 

        Outstanding bills and debts, including credit cards

        Make a significant purchase, such as a vehicle

        College tuition

        Major home renovations.

 

Do you want to modernize your kitchen but can’t afford to? Do you want to go back to school but don’t want to burden yourself with high-interest student loans? While there are other options you should consider first, cash-out refinancing can provide you with the funds you need for significant expenses.


Is it Necessary for Me to Cash-Out Refinance?

No, it is not strictly necessary for anyone to exchange their mortgages for a larger one and withdraw the difference. You might hear of your neighbours and friends refinancing their homes in the traditional sense because the market is optimal, but the cash-out variety is not a trend you need to jump on if you don’t need to.

People have different reasons to refinance their homes this way. Some might owe a wide variety of debts and want to consolidate. Others might have fallen on hard times and need a large sum of money as soon as possible, but they don’t have any other options than to sell their possessions if they don’t want to move. They cannot sell their equity, though, so the best option is to use it as collateral for another loan.

You might be considering cash-out refinancing because delays in receiving your paycheck have made you miss important payments. You had to dip into your savings, which you prefer not to do, but having larger savings from your home’s equity could be useful in the immediate future. Instead, you can turn to apps like Earnin that allow you to access your money on time, up to $500 per pay period. Instead of doing a cash-out refinance to borrow a large sum to pay off monthly bills, you can use Earnin to take out your own earnings.


What are the Disadvantages of Cash-Out Refinancing?

There are several disadvantages to consider before you cash-out refinance. One of them is closing costs, which are typically between 2% and 5% of your loan and can, therefore, amount to thousands of dollars. Similar to how you must pay for private mortgage insurance if you put less than 20% when buying a house, you will have to pay for PMI if you borrow more than 80% of your property’s value. 

Time is also an essential factor. It may take longer to pay off your house, and your monthly mortgage payment could increase. Though interest rates associated with this kind of refinancing may be lower than HELOCs or home equity loans, your lender might charge you a higher interest rate than the first time around.

Cash-out refinancing has its uses, but consider the pros and cons carefully and talk with a financial advisor before deciding it’s right for you.

 

This article originally appeared on Earnin.

 

Please note, the material collected in this blog is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or Services.


Fixed Microsoft Outlook unable to open any URL link in email problem

If you are using Microsoft Outlook as your email client, and facing the problem of unable to open any URL link in your emails, this could be a workable solution for you.

The symptom: whenever you click on a link in your email, expecting your web browser to open the link, or in the case of a mailto email address link, expecting Outlook to open the New Message window for you to write a new email to the recipient, you will get this pop-up error message instead: "Your organization's policies are preventing us from completing this action for you. For more info, please contact your help desk".  


However, if you are using Outlook in your home computer, or your IT personnel told you that they didn't impose any such restriction on your computer, then the actual problem is possibly due to corrupted Windows registry.

You can try to fix it by resetting related Windows registry entries to their original form.

To do this, use Notepad or any text editor to open a new plain text file, copy and paste the following content into it.

Windows Registry Editor Version 5.00

[HKEY_CLASSES_ROOT\SOFTWARE\Classes\htmlfile\shell\open\command]
@="\"C:\\Program Files (x86)\\Internet Explorer\\iexplore.exe\" -nohome"
[HKEY_CLASSES_ROOT\SOFTWARE\Classes\htmlfile\shell\opennew\command]
@="\"C:\\Program Files (x86)\\Internet Explorer\\iexplore.exe\" %1"

[HKEY_CLASSES_ROOT\.htm]
@="htmlfile"
[HKEY_CLASSES_ROOT\.html]
@="htmlfile"
[HKEY_CLASSES_ROOT\.shtml]
@="htmlfile"

[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\htmlfile\shell\open\command]
@="\"C:\\Program Files (x86)\\Internet Explorer\\iexplore.exe\" -nohome"
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\htmlfile\shell\opennew\command]
@="\"C:\\Program Files (x86)\\Internet Explorer\\iexplore.exe\" %1"

[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\.htm]
@="htmlfile"
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\.html]
@="htmlfile"
[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\.shtml]
@="htmlfile"

[-HKEY_CURRENT_USER\SOFTWARE\Classes\htmlfile]
[-HKEY_CURRENT_USER\Software\Classes\.htm]
[-HKEY_CURRENT_USER\Software\Classes\.html]
[-HKEY_CURRENT_USER\Software\Classes\.shtml]

Save the above content in plain text as "fix-my-links.reg".

Login as a user with Administrator rights, and double click on this file fix-my-links.reg to fix your Windows registry.

After that, you should be able to open the URL links in your emails in Outlook now.


Tuesday, January 26, 2021

My L01 handphone selfie stick and tripod with Bluetooth shutter button

You might have awared that I am using Iruin to make use of my handphone camera as computer webcam.

This solution works pretty well. However, I found that I need a mini tripod to hold my handphone to get a better camera shooting angle, and I have found this L01 selfie stick which can also act as a tripod stand. Its price of below RM20 is very affordable.


The length of this L01 selfie stick, when folded, is only about 18.6 cm, which is very handy to carry along. It has a pretty light weight of 155 gram. It comes with a nice pouch too.

To use it as a tripod, just hold your handphone with its clamp, and unfold its 3 retractable legs.


The clamp is flexible to hold handphone of width between 5.5cm to 8.5cm, including the thickness of protective casing, if there is any.

Its length can be extended up to 70cm, by pulling out its stainless steel pole.


Obviously, you can use it as a selfie stick as well, by folding its 3 legs.

Its handphone holder is 360 degree rotatable, so you can take photo and video in portrait mode as well. 


The holder can be tilted up to 200 degree, to adjust the camera shooting angle.

This selfie stick has a handy Bluetooth shutter button, which is detachable.


The shutter button is powered by a CR1632 battery inside it, which is changeable.

To pair this Bluetooth shutter button with your handphone, just long-press it, and confirm the Bluetooth pairing in your handphone.

After pairing, you can use this button to take photo with your handphone.

The button will automatically disconnect and shutdown itself after 600 seconds of non-operation.

This L01 selfie stick is multi-functional, very easy to use, and made with pretty solid material. I like it very much.


Hint: Click on the "Older Posts" link to continue reading, or click here for a listing of all my past 3 months articles.