Comparing the features of each loan will help you reach the best decision:
| Cash-Out Refinance | Home Equity Financing |
|---|---|
| One loan and one monthly payment | Choose between a one-time loan advance or a revolving line of credit. |
| Your existing mortgage is refinanced for a higher overall amount using some of the accumulated equity in your home | You can borrow your home's equity as determined by the current value and less any existing liens on the property. |
| Get immediate cash and spread the payments out over a longer timeframe | Flexibility of a shorter term to help build equity faster OR reduced monthly payments by spreading the cost over a longer term. |
| Usually a lower interest rate than home equity financing | You can borrow more money - sometimes up to 80% of the value of your home. With a line of credit, interest is paid only on the money you actually use, and you can access it whenever you want without having to reapply. |
