November 16, 2021

Should you pay for Christmas with a cash out refinance?

For good or bad, the holidays are expensive.

We all know that going into debt to pay for Christmas cheer and presents is not a financially sound idea, but life is never quite that simple.

Two years of the COVID pandemic, a polarizing presidential election, supply chain disruptions and the general chaos these events have introduced into our daily lives make religious traditions, holiday celebrations and family togetherness more valuable than ever.

If you don't have the funds to cover holiday expenses this year, a cash out refinance might be the most financially sound option available.

What is a cash out refinance?

A cash out refinance is kind of like selling your house to yourself. It allows the home owner to borrow up to 80% of the current value of the home and pays off the existing mortgage. Any equity is effectively converted to cash and can be used for any purpose.

How does it help?

The recent spike in property values and historically low interest rates create a unique situation in which a cash out refinance is a particularly attractive option. Many home owners have found that lowering interest and eliminating mortgage insurance payments, as well as consolidating credit card and student loan debt can make life-altering improvements to their monthly budget.

Things to consider:

  • Are there additional benefits to the new mortgage? Does it lower your rate or eliminate mortgage insurance payments?

  • What other financial goals can be bundled into the loan? Could you consolidate high interest credit cards, pay off student loan debt or get rid of lingering medical bills?

  • What is the potential impact on your monthly budget? Will a cash out refinance put you in a better position to pay cash for your holiday shopping next year?

How to get started:

It's impossible to make a one-size-fits all recommendation when it comes to home finance, budgeting and important holiday traditions. Your best option is to talk to a Boles Group lending professional at Bay Equity Home Loans who can review your circumstances and go over your all of your options. Call 480-279-0032 to get started.


Bay Equity Home Loans – Boles Group is a team of lending professionals located in Gilbert, Arizona and licensed to originate home loans for purchase or refinance in 11 states (AZ, CA, CO, Fl, GA, ID, MN, NM, NV, OK, OR, WA). Boles Group lending professionals have the knowledge and experience to create solutions where other lenders create problems. The team prides itself on responsive, accurate communication and is highly regarded by clients and business associates alike.