Is 2026 the Right Time to Tap Into Your Home’s Equity?
Welcome to 2026! As the housing market in Des Moines, IA, and across the Midwest continues to stabilize, many homeowners are finding themselves in a unique position. Over the last few years, property values have held strong, meaning you likely have significantly more equity in your home than you did when you first bought it. A cash-out refinance is a powerful financial tool that allows you to replace your current mortgage with a new one for a higher amount than you owe, giving you the difference in tax-free cash.
At Midwest Family Lending, we treat our customers like family. Whether you are in Urbandale, West Des Moines, or anywhere in Iowa, our goal is to help you determine if unlocking that equity helps you achieve your broader financial goals. Whether you want to reinvest in your property, consolidate high-interest debt, or fund a major life event, 2026 offers new opportunities for savvy homeowners.
Top Strategies for Using Your Cash-Out Refinance
Once you access your home’s equity, the funds can be used for virtually any purpose. However, most financial experts recommend using the cash to improve your financial standing or increase your asset value. Here are the most popular ways our Des Moines clients are utilizing cash-out refis in 2026:
- Home Renovations & Remodeling: Reinvesting in your home by upgrading a kitchen, finishing a basement, or adding a bathroom not only improves your quality of life but can also increase your property’s resale value.
- Debt Consolidation: With interest rates on credit cards and personal loans often hovering near 20% or higher, using lower-interest mortgage equity to pay off these debts can save you thousands of dollars annually and improve your cash flow.
- Investment Opportunities: Some homeowners use the capital to purchase a second property, fund a college education, or bolster their retirement portfolio.
It is important to remember that a cash-out refinance increases your mortgage principal. Our team of licensed home loan originators can help you run the numbers to ensure the long-term savings outweigh the costs.
| Debt Type | Average Interest Rate (Est. 2026) | Monthly Cost on $30,000 Debt |
|---|---|---|
| Credit Card | 22.5% | $900+ (Minimum Payment) |
| Personal Loan | 11.0% | $650 (5-Year Term) |
| Cash-Out Refinance | 6.5% | ~$190 (Added to Mortgage) |
The Midwest Family Lending Difference
Why choose a local mortgage broker over a big national bank? At Midwest Family Lending, we don’t just offer mortgages; we offer personalized solutions tailored to your life. Because we are an independent mortgage broker, we can shop multiple lenders to find the competitive rates and terms that fit your specific situation. We aren’t tied to one bank’s products.
We are proud to have earned a 5-star reputation because we are trustworthy, experienced, and fast. We know the Des Moines metro area real estate market inside and out. Whether you are looking to remove private mortgage insurance (PMI), lower your monthly payments, or take cash out, we are here to guide you through the process with transparency and care.
Q1: How much cash can I take out of my home?
Generally, lenders allow you to borrow up to 80% of your home’s appraised value. For example, if your home is worth $300,000, your total new loan amount (including the cash out) cannot exceed $240,000.
Q2: Is the cash I receive taxable income?
No. Because the money is a loan that you have to pay back, the IRS typically does not consider proceeds from a cash-out refinance as income.
Q3: How does a cash-out refinance affect my interest rate?
You will be replacing your existing mortgage with a new one. This means your new rate will apply to the entire loan balance. We help you compare your current rate with today’s market rates to ensure it makes financial sense.
Q4: Are there closing costs for a cash-out refinance?
Yes, similar to your original mortgage, there are closing costs (appraisal, title fees, origination). However, these can often be rolled into the loan amount so you don’t have to pay them out of pocket.
Q5: How long does the process take in Iowa?
Typically, a cash-out refinance takes between 30 to 45 days from application to closing, though our team at Midwest Family Lending works hard to make the process as fast and efficient as possible.Get Your Ducks in a Row: Schedule a Free Consultation Today!