Home Equity Loan vs. Cash-Out Refi with higher interest rates
I have been listening to the podcast almost daily for quite a while, and I always hear about people doing a "cash-out refi" to pull out equity. My question is - why do I not hear more about people doing home equity loans (with BRRR's and otherwise) as interest rates rise as opposed to cash-out refi's? It seems to me that it would be wise to keep the original (say 3%) mortgage and pull out only the equity at 5% instead of a whole new mortgage at 5%. I know that home equity loan rates are a little worse than a cash-out rate, but I would think that would rarely make up the difference in refi-ing out of a great rate for an entire mortgage. For example, I just yesterday listened to a Seeing Greene episode (excellent format, btw) where David explains that he is doing a cash-out refi into a 1-2% higher rate because he knows that he can make way more with the equity in a new deal than what he is losing to interest. I fully understand that rationale, but I'm wondering why he would not instead take out a home equity loan at the higher rate in order to achieve the same result while only affecting the rate on a portion of the loan? Thanks in advance for any insight!