Cash Out Refinance

You can refinance a mortgage as often as you can get approved. Just understand you will choke down all the closing costs every time so it isn't a good idea to do it a lot.

Really if you are doing remodeling it is cheaper to get a home equity. Seconds do not have the closing costs a first does. The term is shorter but you shouldn't be financing a remodel for thirty years.

We've re-fi several times but when we do we pay down the balance and would never ever consider taking cash out for any reason. That is not a good idea.

We did re-fi within 6 months to get an even lower rate which is less than 4% now but each time... we took a substantial amount and paid down the mortgage. My hubby is a financial guy, we do no cost closings, no escrow, etc.

Re-fi should not be used as a fall back for cash flow.

Save the difference in your hubby's new paycheck due to his raise and then use that money for your remodeling job or best yet, save it. Do your best to live below your means and then when tough times happen, you are prepared because your are not in debt up to your eyeballs.

Best wishes to you!

Cash out refinance is almost always a bad financial decision. If you needed it for life saving medical reasons, or some other dire circumstance, it can be a reasonable option. But it isn't a good idea to cash out so you can buy stuff.

Remodeling is nice, but not a need, so make a budget and start saving money from your household income for a 'remodel fund'. It should be simple given your husband's increase of salary.

Jo W and Cheryl made excellent points. You are going to spend a lot of money to pay closing costs on yet another re-fi. And depending upon the amount you plan to cash out, you might be better served just buying a totally different home--the closing costs won't be much different; OR taking out a 2nd or equity line of credit.

My first thought, however, was more in line with TFPlano/Allen-- if your husband just got a new job and is making more money, start saving it. Two reasons:
1) job stability/security--he just started a new job, so now is not the time to run out and take on new debt or set yourself up with higher monthly obligations. What if is 6 months from now, he isn't happy with this new job or they need to let him go for some reason?
2) You decided not so long ago that it wasn't worth it to take out more, when you did the re-fi. Not sure what you had planned to take it out for at that time (considering remodeling and decided to wait, or for something else)... but you decided, whatever it was, that it wasn't worth doing at that time. Your thinking now, almost seems as if it is the old "burning a hole in your pocket" syndrome. Don't fall for it. ;)

Start putting aside all the "new" money your husband is making and 6 months from now, reevaluate whether you still want to remodel. If so, you should have a good chunk of the $ saved already (if he is making enough more money that you are feeling comfortable doing ANOTHER re-fi so soon). You may decide (when you have cash in hand) that you'd rather spend it on something else, or rather save/invest it, or use it as down payment on a different house, or whatever.

For me, I take all the media reports ("it's time to re-fi now" "now's the best time ever to re-fi" "rates can only go up" blah blah blah) with a grain of salt. Yes, they CAN be a good idea... but not in the way that cleaning out your closet is. It is NOT something you should be doing regularly. It costs money to re-fi. ONCE if you have a ridiculously high mortgage rate from 5 years ago or something and now you can go from a 6% to a 3%.. heck yes! No question! But from a 4% to a 3.5% ? Not necessarily. Not so fast.... How much will that cost to do that? How long will it take (how many months of payments) before the "savings" each month "pays off" the cost of the re-fi? And you are apparently wanting to do this to take money out, not to save interest. Not the way I would go....

Three:

There is not really a limit on refinancing. You just need to make sure that you are doing it for the right reasons.

You took a little money out. How much more are you talking about?
Are you planning on staying in the home a while longer - like 5 to 7 years?

If you are considering a hefty amount? I would just look to buy a new home. Seriously. If you are going to do something major - then look for a new home and compare the costs to remodeling to that of a new purchase.

If he has a new job? Most likely, with today's tighter loan/mortgage rules - he will have to be at that new job for at least a year making that new income before they would would approve another loan.

I do know a friend who refinanced her mortgage twice in 4 months. Her mortgage was at 5.75% - the rates dropped to 4% and now she's at 3.1%. But she didn't take cash out - this was a straight refinance for a better rate.

I personally wouldn't do it. I would wait. I would gather information on what you want to do - how much it will cost and how much a new home would cost you. As well as whether or not the "improvements" you will be doing to your home will price you out of your neighborhood and you won't be able to sell it for some time.

Much to think about. Sounds like time to make a list of pros and cons and what you are looking to do.

There is no time limit, as long as you can find a company that will give you a loan. Remember that all the inquiries make your credit score drop.

Financially it's not a good move. Since hubby is making more money, why not just save the difference?

You can refi anytime. Call the Loan Officer you just used and see what can be done. They may be able to add a Home Equity Line of Credit and get it done real quick. Also since your husband is making more money, how about saving up & paying cash for the remodeling.

This question is hard to answer without knowing what the interest rates are on the card. Do you have more than one card?

First, I agree with the posters who said to pay as much in cash up front as you can and try not to put much on the card. I personally pay mine off in full each month so I never pay interest - that's wasting money. I'd much rather spend my $ on something fun instead of "interest".

Second, if you have more than one card, charge it to the card with the lowest interest rate. Then work on paying the card with the highest interest rate down aggressively. Repeat with subsequent cards.