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    Record home price appreciation in the last few years has pushed tappable home equity to new heights!

    According to a report published by data vendor Black Knight this week, the third quarter of 2021 saw a nearly $250 billion dollar increase in tappable equity—a record. With record high tappable home equity, now is a great time to consider a cash out refinance to fund those projects or repairs around the house, start an addition, consolidate high interest debts, or whatever you need the extra cash for. 

    The report from Black Knight also sheds light on the fact that the aggregate total of $9.4 trillion is up an astonishing  32% from the same time last year and nearly 90% higher than the pre-great recession peak in ’06.

    That works out to roughly $178,000 available to the average homeowner in tappable equity!

    Did you know you can use a cash-out refinance as a way to put a down payment on an investment property? With Griffin Funding’s DSCR no income investment property loan, you don’t have to show your personal income or tax returns.  Qualify simply off the rental income of the investment property.

    Overall, mortgage holders withdrew more than $70 billion in equity in the third quarter, equivalent to just 0.8% of available equity entering the quarter, the report said. Year-over-year, more than a million cash-out refis were originated.  It’s also notable the the share of cash-out refinances is poised to rise further if mortgage rates continue to trend upward in the next few quarters.

    Some cities with the highest concentration of tappable equity in the nation are Los Angeles, San Francisco, San Jose and Seattle.  Additionally, the report by Black Knight said that the monthly principle and interest payment to purchase an average-priced home with 20% down increased by close to 25% since the start of 2021.

    The shortage of housing inventory continues to put pressure on home prices, and they will likely continue to rise in the foreseeable future.  Even if home prices hold steady, a rise in 30-year rates to 3.5% will result in the tightest affordability since 2009.

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    Here are just a few ways to utilize a cash-out refinance:

    1. Build emergency savings 

    Having emergency funds can turn a potential disaster into an inconvenience. Emergency examples include an unexpected job loss, car repairs, medical emergencies, or home repairs. Many experts recommend having at least three to six months of living expenses in an emergency fund. Having this amount avoids the stress of scrambling for funds or borrowing money. 

    2. Pay off high-interest debt

    With a cashout refinance, you can get funds to pay off your high interest debts.  Target the debts with the highest interest rate.  The more equity you have, the more cashout you can use.  The earlier you pay off debt, the less interest paid over the long run. See how inexpensive it could be to take cash out below. 

    3. Increase retirement contributions

    The longer retirement funds are in the market, the more they will compound and grow. So the sooner and more you contribute, the better. By using the equity in your home to take cash out at a low interest rate, you can then invest that money in faster, higher returning investments.  

    4. Invest in education

    Getting additional training, education, and professional licenses could make you a strong candidate for getting that next big promotion or raise. You can also use the cash to save or pay for your children’s education.  Education isn’t inexpensive, but it’s highly valuable. 

    5. Home improvements

    Strategic renovations and upgrades can increase the value of a home. Maybe you have been waiting to start that kitchen remodel or adding on an addition- now is a great time to use the equity you have while rates are still low.  Start those much needed renovations or repairs today. 

    6. Buy an investment property

    You could use cash from refinancing your primary residence to buy more real estate, such as a rental or investment property.  As an asset class, real estate can build wealth quickly because you can leverage your purchase.  This is a great way to expand your real estate portfolio.  In many cases, homeowners take a cash-out loan on their home and buy a rental property with cash.  When they want to invest again, they do a cash-out refinance on their existing investment property to buy another one. The result is a robust collection of rentals that produce ongoing income and tend to hold their value historically.

    If you haven’t already considered a cash-out refinance, now is a great time while rates are historically still very low. 

    Griffin Funding is licensed in: ArizonaCaliforniaColoradoFloridaGeorgiaHawaiiIdahoMarylandMichiganMontanaTennesseeTexasVirginia, and Washington!  Specializing in VA and Non-QM loans, we have access to wholesale rates and offer to beat or match any rate on the market!

    Want to learn more? Contact us online or call us at (855) 394-8288 to receive your no-obligation consultation. 

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    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.