Choose the Home Equity Loan Type that makes sense for you

When choosing a loan using your home as collateral, you have three basic choices: equity loan, home equity line of credit (HELOC) or cash-out refinance. We’ll break down the pros and cons of each option.

Equity Loan HELOC Cash-out Refinance
Fixed or adjustable? Fixed Adjustable (can have an interest only option) Either (can have an interest only option)
Why choose this?
  • You prefer the security of a fixed-rate loan.
  • You want to keep your existing mortgage.
  • You prefer a line of credit over a lump sum.
  • You want the lowest rates on your loan.
  • You need the money fast.
  • You already want to refinance to take advantage of lower rates.
  • You need more than $100,000.
Why not choose this? The rates are higher than their HELOC counterparts. Rates are adjustable, so they may rise over time.
  • You want to keep your existing mortgage.
  • You need the money fast.

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