Cash Out Refinance VS Home Equality Line Of Credit

[Thernest Brown]

Hello Everyone,

What's the advantages and disadvantages of Cash Out Refinance VS a Home equlity Line of credit  ?

[Torrell Palmason]

I'm going to list out advantages and disadvantages in a bullet format. I am assuming this will be on owner occupied as most people will find it difficult to get a HELOC on rental.

Cash-out Refi
One monthly Payment 
Generally a Higher rate than No cash-out but lower than a HELOC
Lump sum payout
up to 80% Loan to value 

HELOC
Higher variable rate than a Cash-out
Can get a new HELOC once the term expires
two monthly payments one for the first mortgage and one for the HELOC
Line of Credit that can be continuously used during term on HELOC, typically a 10 year draw and then a 20yr repayment period
up to 89.99% to 100% Combined loan to value

Both of these options have their pros and cons and depending on what it is you are wanting to do either could be a good option. Discussing your plans with a lender can help determine which option could be right for you.

Best of luck!