Now is the Time to Release Equity for Cash: A Global Real Estate Perspective on the Strength of the U.S. Dollar

The U.S. dollar has been pushing down the rest of the world’s currencies over the past few months. The Yen is at a 24-year low compared to the dollar, and the Euro and Dollar have not been on par since ’02. Day after day, it proves that it is the world’s most dominant currency, with 88% of transactions having the dollar on one side. In times of confusion, like rising global inflation and precarious geopolitical relationships, investors love the stability and safety that it offers. With the federal reserve increasing rates, even safe investments, such as treasury bonds offer a good return on investment. This has led to investors pouring money into the United States, which has increased the strength of the world’s most dominant and secure currency. 

What is Cash-Out Refinancing?

Cash-out refinancing, if you do not already know, is a method of trading home equity for liquid cash. Here is a thought experiment that might help you understand a little better:

Let’s say you have $200,000 left on your mortgage, and your property is valued at $1,000,000; you would have 80% equity in that property, or $800,000. Lenders typically make you keep at least 20% in equity ($200,000), so you could borrow $600,000[1], usually at a lower rate and on different terms[2]. America Mortgages lets you cash out up to 70%. You would then pay it off like a regular mortgage with monthly instalments under a new agreement. This $600,000 is now a liquid asset that you can use at your discretion. With such a strong dollar, it means that there are lucrative investment opportunities at your fingertips with the extra cash. 

Pros and Cons

There are pros and cons to cash-out refinancing, especially with a strong dollar. 

Pros:

  • Access to a large amount of liquid cash.
  • This can be used for investments, refurbishing/remodelling, or for pleasure. Upgrades like refurbishing can boost your home value, and these investments mean you can make money in different sectors.
  • When living abroad and your living expenses are in currencies other than USD, this is a perfect time to take advantage of the strong U.S. dollar.
  • America Mortgages Loan Officers are with you from day one and beyond. We keep you updated with competitive rates because it is not just your journey; it is ours as well.
  • Even though rates have increased, historically, they are still low.
  • 30-year fixed rates and interest-only options are available regardless of age.  

Cons: 

  • You need to have equity to qualify.
  • You may owe more as you would be refinancing your existing mortgage. 
  • Your rate may be higher than what you currently have in place.

What does this mean for global real estate investors? 

Cash-out refinancing has never proved to be more useful to real estate investors until recently. With cash-out refinancing, you can trade home equity for cash and invest it into other ventures, experiences, local currency, or products, such as treasury bonds, taking your dream trip to Mykonos, or buying that designer bag from foreign fashion houses.

With the rest of the world being so affordable, it is a great time to hold onto U.S. Dollars. Let your money make you money with America Mortgages cash-out refinancing. Contact us today to speak to one of our loan officers: hello@americamortgages.com.

www.americamortgages.com

[1] There are final closing costs, so this number would be lower typically; for the sake of simplicity, they’re being ignored in this thought experiment. 

[2] Contingent on the lender and Cash-out refinance plan