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Refinancing is to pay off your existing mortgage with another one at a lower rate.

A cash out refinance is refinancing your existing mortgage and borrowing some of your equity in a lump sum to use for other purposes. Such as home improvement, college tuition, family vacation, etc.

People have many reasons to use a cash out refinance is to use the equity in their home to invest in real estate, or start their own business.

The cash out refinance are very good tools when used for the right reasons. It is not wise to do cash out refinancing if you are going to receive a higher interest rate than what you already have on your current mortgage.

If you have a really good rate on your current mortgage, it would be wise to leave it alone.

However, if you are looking to tap into the equity you have acquired in your home without touching your current mortgage, you may want to consider a Home Equity Loan.

With a home equity loan you can borrow the equity you have acquired without touching your first mortgage. The home equity loan is also referred to as a second mortgage.

For instance, if you have acquired $50,000.00 worth of equity in your home, you can borrow up to about 90% of that equity, without your first mortgage being affected.

The cash out refinance and the home equity loan can be very similar and serve almost the same purpose, your situation should determine the right choice for you. The cash out refinance is a first mortgage where you will receive all of your cash upfront when you close your mortgage. The payment will remain the same throughout the rest of the term of the loan. With a home equity loan you are not required to take all of the cash you are needing at the time of close. You can draw on the line like a credit card to take only as much cash that you need. The payment for the HELOC will fluxuate until you fix the term with the bank.

As always, I want to leave you with this reminder. Do your homework, educate yourself, and shop around for the best deal. The best place to shop around for a mortgage refinance is at www.geniusrates.com. There you will find one form that you can fill out and receive back multiple offers from several different mortgage brokers and banks.

I received an email from Andy Jenkins a little while ago (why do I stay up so late reading my emails? (   ) and I just had to read the blog post. It’s something I fully believe everybody should be doing; not necessarily in internet marketing and consulting for small businesses, but that everybody should have a second stream of income to supplement their day job and make their lives better. So I read the article and had to post a reply, which I felt was sooo good I had to share it with you guys. Here it is…..

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Hey Andy,

I like your style of writing: upfront, to the point, in your face, funny and so on. I didn’t want to say you’re an inspiration to us all because it always looks soooo cheesy and to me it borders on adulation by the masses… but this time I have to hand it to you… your message was pretty darned good and you’re so right. It did the job with me and got me to thinking about actually doing something along these lines.

You see, I work full time at the moment and I’ve got a bit of a thing about being a full time employee and then holding myself out to be a “consultant” to business people and entrepreneurs that have had the guts to break out of the J.O.B. mould and work on their own business. I haven’t done this yet (although I want to) as I’m not prepared to risk my families security for the sake of my dreams and ambitions. Why should they suffer IF it were to go horribly wrong? Those in the “guru business IM world” that espouse the ideology of “burning your boats and making it work”, i.e. give up your day job so that if you don’t succeed, you won’t be able to eat or keep a roof over your head or pay the bills etc which literally FORCES you to succeed, are plain wrong. Might work with some people, but not for most. Does that make us bad or poor entrepreneurs or business people. NO! We’re sensible. BUT, as you write so clearly, consult alongside your day job UNTIL the consulting work is more than the day job, THEN give up the day job (if you want to that is!).

So please keep writing posts about this topic and give your readers practical hints and tips on the best way to do it or the best resources from which to learn how to break into this market. Remember here in the UK we are in a deep recession so there is a barrier from the start in terms of winning over small businesses and hiring us for such work.

I would be very interested in knowing how to charge for such work. What’s it worth? How do you strike a deal that’s win-win for both me as a consultant and the business as the client?

Please continue Andy……

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The URL you should follow if you want to read more about Andy’s original post and follow the comments is below:

http://www.andyjenkinsblog.com/2009/10/22/rant-consulting-is-a-bad-business/#comment-1667

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