HELOC vs. Cash-Out Refi: Which One Makes Sense?

Both let you tap your home equity. Different tools for different situations.

HELOC (Home Equity Line of Credit):

Revolving credit line. draw what you need

Variable rate (currently ~8-9%)

Keeps your existing mortgage untouched

Best if: you have a low first mortgage rate and need flexibility

Cash-Out Refinance:

Replaces your current mortgage with a new, larger one

Fixed rate (currently ~6.2-6.5%)

Resets your loan term

Best if: your current rate is already high or you need a large lump sum

The deciding factor: What's your current mortgage rate?

If you're at 3.5% from 2021, don't touch that first mortgage. Get a HELOC for the cash you need.

If you're at 7% from 2023, a cash-out refi at 6.2% improves your rate AND gets you cash. Win-win.

I'll run both scenarios for you in 10 minutes.

(805) 801-1380 | ryanptm.com