Appraisal with cash out -advantages?

[Anita Morrish]

Not sure if this is the right forum but it's about a mortgage...so, we've lived in our house for 2 years. It's a new development and we know the starting selling prices on the houses have gone up since we moved in. We are saving/putting together money for a new investment and I wonder if it's too early to get an appraisal on our house to see if there would be a cash out option. Is this a good or practical option if I am new to investing and looking for creative ways to gather my funds? Have you done it and what was the outcome? Thank is advance

[Steve Vaughan]

A 2-yr old mortgage probably has a great fixed rate.  I'd be hesitant to do a complete refi just to pull out some money I may need at some point. Once the words 'cash-out' enter the refi purpose, costs and obstacles rise as well.

@John Matthews has an excellent point of having a defined purpose and timeline for the cash out.  Have both first.

@Mindy Jensen brings up an excellent option of a HELOC instead. You can keep your existing first and have a line of credit if you qualify. It's much cheaper to do as well.

Watch your ROI. If it costs $4k to get $10k out, that's a lousy 'investment'.

I refinanced to a 15 in 2012 to a great fixed rate.  I won't be touching that.  My principal payments went from $200/mo to $1100/mo with an increase of only $100/mo from the 30.  It will save me $193,000 in interest over what the 30 would have been.  Don't forget that this decision will play significantly into where you financial picture is 10 or 20 yrs from now.  Not worth rocking the boat for a few grand.  Cheers!