Learn the key differences between a cash-out refinance and home equity line of credit (HELOC) and see what could be the best option for you.
We’ll break down the differences between a cash-out refinance vs. a home equity loan, and help you narrow down which option is best for you.
Discover the difference between home equity loans vs cash-out refinances. Learn the financial implications of each option for accessing property value.
As home values skyrocketed in the last few years, homeowners have enjoyed a major perk: more equity. Equity is your current home value minus what you owe on your mortgage. For many homeowners, their equity has seen a significant jump. That’s good news for homeowners hoping to refinance. Since it’s very hard to refi without equity (read: impossible with most loan programs), people will need to leverage the part of their home that they own outright to get into a new home loan. That refinance means paying closing costs, but a refi can benefit ...
Feature, Cash-out refinance, Home equity loan ; How the funds are paid out, → You'll receive your funds in a lump sum., → You'll receive your funds in a lump sum. ; Monthly payments, → Your monthly payment includes both principal and interest charges., → Your monthly payment includes both principal and interest charges. ; Minimum credit score, → You may qualify with a credit score as low as 500., → You'll need at least a 620 credit score to qualify, though some lenders have higher minimums.
Deciding between a home equity loan and a cash-out refinance can depend on these important factors.
A cash-out refi vs. a home equity loan: Understand the advantages and disadvantages of each to figure which works best for you.
, HELOC, Home Equity Loan ; How It Works, A revolving line of credit based on the equity in your home, A one-time loan based on the equity in your home ; Money Received, Draw on funds as needed, One upfront lump sum ; Interest Rates, Variable, Fixed
The choice between a home equity loan and a cash-out refinance in today's rate climate depends on multiple factors.
Cash-out refinances and home equity loans can both help you tap into your home’s equity. Learn the pros and cons.