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Refinancing to Free Up Cash Flow

Date: September 10, 2021

How Refinancing Your Home Could Save You Thousands

There’s a lot of talk in the headlines about interest rates being lower than they have been in many years – sending droves of homeowners to refinance their loans to take advantage of the numerous financial benefits. But is it right for everyone, and how could it help you?

Did you know that refinancing your mortgage can lower your interest rate (and therefore the monthly payment), get you a shorter payoff term, and have the ability to cash out some or all of the equity for other uses. Or, if you don’t need the cash – refinancing will help you build equity in your home more quickly. Furthermore, you do not have to pay income taxes on the money you get through a cash-out refinance. If you use the cash-out funds for improving your home (adding a swimming pool or hot tub, replacing roof, remodeling, adding another room, adding security systems, etc) then you can deduct 100% of the interest on your original loan balance, no matter how much equity you take out of your home. 

If your current mortgage rate is greater than 3.32% – now is your chance to cash in. 

One of the many ways we serve our clients includes cash-flow engineering (a fancy term for freeing up more cash for you to spend in other ways, without making more money). Many business owners and individuals don’t realize that making a couple of small tweaks to how they pay their bills each month can add up to thousands in savings. This is just one example of how it works. 

Making a change to the structure of your mortgage to take advantage of the opportunities available in the market translates to lower monthly payments, less time to pay off the debt, and lower interest paid throughout the life of the loan. The extra cash making that change would free up could be invested into retirement or an investment vehicle paying over 10% in compounding interest. 

To put it into perspective – if you have 0 dollars saved right now for retirement, and you were able to free up just 1,000 extra per month to go toward your retirement instead of the bank, the effect of compound interest would turn that 1,000 per month into 756,000 in 20 years (240,000 from your contributions, 516,030 in interest from the bank)! That’s something worth considering! 

If you need some help engineering your cash flow to work for you so you can retire sooner with more money – we’re experts at spotting opportunities and we love to help. Click here to book a complimentary strategy session. 

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