Is cash-out refinancing or a HELOC loan better for you? Here are the pros and cons

If you want to tap into your home’s value for extra cash, you have two options: a cash-out refinance loan or a home equity line of credit (HELOC). With a cash-out refinance, you can replace your current mortgage with a larger loan and keep the extra cash. A HELOC, on the other hand, allows you to borrow against your home equity. Both options have pros and cons. A cash-out refinance provides more money upfront and may have lower interest rates, but it could result in a higher mortgage rate and closing costs. A HELOC offers flexibility and lower interest rates but comes with the risk of having two mortgages and a variable interest rate. The choice between the two depends on factors such as your debt-to-income ratio, amount of home equity, and credit score.