HELOC vs Home Equity Loan vs Cash out Refi

[Pablo Flores]

Hey Guys,

If I own my home outright and have no mortgage, and I want to tap into some of my equity to purchase another investment property, which of the above would be the best way to do this? My home is worth around 350k, and I only need about 120k for the investment home purchase. I've done a good amount of research but it seems like their are pros and cons to all of these loan options. Please help me understand but wouldn't a HELOC be better here because I could just draw what I need instead of getting a whole new loan on my home. It seems like the only downside is the variable rate but a lot of places let you lock the interest rate. If on the other hand I did a cash out refi would I just be able to pull out 120k from my homes value instead of getting a new loan on the entire value of the home? Maybe I'm not understanding this right so thanks for any clarification!