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Cash-Out vs. HELOC Refinancing
September 13, 2021 | Posted by: Marc Crossman
If you’re interested in borrowing against your home’s available equity, you have choices. Some options are to refinance and get cash out, or to take out a home equity line of credit (HELOC).
Here are some of the key differences between a cash-out refinance and a home equity line of credit:
A cash-out refinance  replaces your existing mortgage with a new home loan for more than you owe on your house. You must have sufficient equity built up in your house to use a cash-out refinance. The difference goes to you in cash, which can be spent on home improvements, debt consolidation, or other financial needs.
With a  Home Equity Line of Credit (HELOC ), you are borrowing against the  money already invested in your home. Much like a credit card, you have a  certain amount of money available to borrow and then pay back. You will only pay interest on the amount you borrow.
HELOCs often begin with a lower interest rate than cash-out refinancing loans, but the rate is adjustable.
If you need help determining the best financing choice for you, get in touch and we would be happy to help!
