What’s the difference between a cash out refinance and a home equity loan?

Cash Out Refinance
  • A cash out refinance is a first new mortgage that allows you to withdrawal cash out of your property’s equity.
  • The more equity that you have in the property, the more cash that you can withdrawal.
  • Typically, most people use a cash out refinance to 1) consolidate outstanding debts, or 2) make home improvements.
Home Equity Loan
  • Home Equity Loans, or commonly referred to as Home Equity Lines of Credit (HELOCs) are second mortgages. A second mortgage is a mortgage that you take out on top of your first mortgage and is second in terms of priority of liens (compared to the first mortgage).
  • A second mortgage carries more risk for a lender to insure; however, that’s okay! We can help you outweigh the pro’s and cons of doing a second mortgage.
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