If you’re searching for the best way to access your home’s equity, you’ve probably come across Home Equity Lines of Credit (HELOCs) and cash-out refinances. Both options let you tap into your home’s value, but which one is right for you?

What is a HELOC?

A HELOC is a second mortgage that allows you to borrow money against your home’s equity. It works like a credit card—you can withdraw funds as needed and only pay interest on what you borrow.

HELOCs often come with variable interest rates, meaning your payments could increase over time. Plus, since a HELOC is a second mortgage, you’ll have two monthly payments to manage.

When Should You Choose a Cash-Out Refinance?

A cash-out refinance replaces your current mortgage with a new one but with extra cash included.

✅ One Loan, One Payment – A cash-out refinance eliminates the hassle of juggling two loans by combining everything into one mortgage.

✅ Fixed Interest Rates – Unlike HELOCs, cash-out refinances often come with fixed rates, keeping your monthly payment predictable.

✅ Typically Lower Overall Costs – Even with closing costs, a cash-out refinance could save you money by avoiding high variable interest rates and extra payments from a second loan.

When Should You Choose a HELOC?

A HELOC can make sense if you only need a small amount of money and want access to cash over time rather than all at once. It can be a flexible option for short-term needs, but be mindful that you will be managing two mortgage payments.

Which Option Is Best for You?

The right choice depends on your financial situation and goals. Both HELOCs and cash-out refinances have their advantages, and there is no one-size-fits-all solution. Speaking with a mortgage professional can help you compare your options and determine the best fit for your needs.

Get Expert Advice on Your Home Equity Options

Not sure whether a HELOC or cash-out refinance is right for you? Connect with our team! We can help you compare your options, crunch the numbers, and find the best solution for your financial goals.