Cash-out refinance vs. home equity loans
Let's say you have a home that's worth $150,000 and you owe $100,000 on the mortgage. That means you have $50,000 of equity in your home, which is like having $50,000 in a savings account. A cash-out refinance allows you to access that equity. For instance, if you need $10,000, you can refinance your mortgage so that you owe $110,000 and the lender then gives you $10,000 in cash at closing.
With a home equity loan, you keep your original mortgage and take out a second mortgage for the amount of equity you are tapping into. Since every homeowner's situation is different, your best option will depend on your specific circumstances. At
, we have several mortgage options to choose from. When you compare home equity loans and cash-out refinance further, there are four things you should consider in order to determine what's best for you:
