Cash-out refinance
Replace the current mortgage and receive eligible equity proceeds.
Compare equity options
The same home equity
can support three different loan structures.
The strongest option depends on whether you replace the first mortgage, add a second payment, need a fixed amount or want reusable access.Home-equity loan
Add a typically fixed second-lien amount and payment.
HELOC
Use a revolving line whose rate and payment may change.
Hold the comparison steady
Use the same cash need and expected holding period. Compare the new first-mortgage rate, second-lien rate, closing costs, payment, total interest and effect on future flexibility.
Questions that change the answer
A low existing first-mortgage rate can make replacing the entire balance expensive. A variable-rate line can preserve flexibility but introduce payment uncertainty.
- How much cash is needed now?
- Is future access important?
- How long will the financing remain open?
- Can the payment change?
- What happens to the current first mortgage?
Compare equity options.
Review the current mortgage, property and cash goal together.