Heloc or Cash out refinance
Good morning everyone ! So my property has gained equity and I’m looking to take that money out to reinvest it. How do I go about doing so? Which method should I use Heloc or cash out refinance? Can someone help me understand the process. Thank you
Hey Kris,
The biggest difference between the two is a HELOC is borrowed as you go as opposed to a Cash Out Refinance which is all at once. I would reach out to your current lender and inquire about either one. For example I worked for a not-for-profit that did cash-out refinancing and did not do HELOCS.
You will want to take a look at the costs involved with the amount of money that is needed. Also, is this just a short term loan that you are needing? Or will this be paid back slowly over many years? If its a short term loan then a HELOC would maybe be beneficial. The costs are usually less, but the terms are not as appealing in most cases.
Another thing to consider is the current status of your mortgage. Where is your rate at? If you have a chance to do a cash out and lower your interest rate on the bulk of the mortgage, this could potentially save you even more money.
