Cash-Out ReFi or Equity line of credit

[Robert Richardson]

What’s the difference?

[Dan H.]

Most HELOC are adjustable rate. I believe most (I do not really know the stats, but fixed rate is an common option) refinances are fixed rate.

We use HELOC for shorter debt such as to purchase a property that we plan to value add and refinance in the near future. Or to purchase all cash and then refi. If we are using the loan for something of unknown or long duration, we use cash out refi.

It is nice to have a fixed rate loan that will not increase for the duration of the loan.  This is especially true with interest rates hovering near all-time lows.  There is little room for interest rates to go down, but a lot of room for interest rates to go up.

Good luck