Greenbook: A Local Guide to Chesapeake Living - Issue 6 | Page 34

offset by any financial windfall.
For example, you could negotiate
a percentage difference in your
mortgage’s annual interest rate,
which would result in a lower
monthly interest payment, leaving
enough money in your budget to
pay for school. By lowering your
present mortgage rate by even
just a percentage, you will save on
the overall payment or principal
paid to your mortgage lender over
the life of the loan. Lowering the
rate and terms on your mortgage
could have the coincidental benefit
of allowing you to eliminate
Mortgage Insurance (PMI) on any
equity you may have earned over
the life of the original loan. The
federal target for eliminated
PMI is 80% Loan to Value. If
your equity exceeds 20% of the
appraised value of the home, you
could remove the PMI from your
monthly payment, which of course

results in more money in your
pocket.
A Cash Out Refinance allows you
to walk away from the settlement
table with funds you can apply
to anything you decide on,
including college. Cash out
refinancing requires 80% loan
to value or less on your property
appraisal value. As per the above,
your equity must exceed 20% or
more of the appraised value of
your home.
The advantages to negotiating
a Cash Out Refinance is that the
mortgage holder receives residual
funds almost immediately and that
any closing costs can be used as a
tax write-off.

mortgage. You will be paying
down the loan for much longer
than the original twenty or thirty
years you may have planned on.
Also consider that you will have
less equity when you attempt to
sell the home in the future.
Knowing the benefits and pitfalls
to using mortgage refinancing as
a financial tool to pay for school is
important as you consider a long
term strategy for your family’s
personal wealth. We invite you to
contact C & F Mortgage to learn
more about if refinancing is
possible and strategic for you.

The downsides of refinancing your
home are important to know.
Essentially, renegotiating the
terms of your mortgage contract
will extend the life of your

Striving to make a difference...one step at a time

J. Melvin Premier Properties is teaming up with
Walk the Walk Foundation that strives to make
a difference in the lives of people and communities
in need through the Walk of Christmas, Back to
School & Diaper programs.
Drop off donations to J. Melvin Premier Properties
at 24 Annapolis St., Annapolis, MD and receive
a coupon to Squisito Pizza. To find out more
visit www.wtwf.org for more information.