The Viability of Funding College with a Refinance & Cash OutArticle Posted by Expert Author: Tony Caro on 04/08/2013
The cost of a college education can be quite prohibitive. This is why many will look towards a finance and cash out option as a strategy to pay for the tuition. How can you do this? The process is relatively simple. You would refinance your mortgage for the full value of your home even though a significant portion of it was already paid off. The remaining balance would be put towards your college expenses. For example, if your original mortgage amount was $100,000 and you have paid off everything but a remaining $50,000 balance, you would refinance not for $50,000 but for $100,000. The additional $50,000 would be used to cover your college tuition. This strategy might be a risky one because you now are paying more on the home than it is worth so you will be relying on the financial benefits from your education to recoup your investment. If you experience an increase in income of $15,000 more dollars per year after graduating, this would come out to $60,000 after four years. This would definitely be a successful outcome to the refinance and cash out strategy. For more information on how to budget for specific planned expenditures, check out http://www.refinancehomemortgageguide.com/.
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