Best Free Mortgage Calculator With Taxes And Insurance

Login Login Remember Me. If you are preapproved for a mortgage, a lender will issue a letter stating the estimated loan amount and mortgage rate you qualify for based on your financial conditions. Get unique products to take care of your financial needs. This means that your chances of qualifying for a home equity product may be lower. Tammy is committed to supporting Relay for Life and regularly volunteers in her community.

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To see the difference between your interest only and principal and interest repayments, run two calculations and compare the results. Use our calculators to help you find ways to own your home. This comparison rate is true only for the examples given and may not include all fees and charges.

Different terms, fees or other loan amounts might result in a different comparison rate. Package benefits cannot be taken in conjunction with, or in addition to other special offers, negotiated rates or discounts.

Not available to company and trust account holders. The output or result of these calculators: If you need more information, please call 13 33 We recommend that you consult your financial adviser before taking out a loan; c.

When assessing ability to service a loan, St. George may use an interest rate that is higher than the current interest rate for the loan requested. The interest rates used in the calculator: George's standard interest rates and include any package or promotional discounts; and c. Print this page Email. Calculate your home loan repayments. I would like to borrow. I would like to buy. To live in An investment. Over a loan term of. Over a loan term of years. This ensures you are invested in the project and are less likely to default on the loan or walk away if the project runs into issues.

Typically variable interest rates during the construction phase. Higher than traditional mortgage rates. All the documentation necessary for a traditional home loan, plus information on the builder and detailed building specifications for the project.

Talk to your bank to begin the process of applying and qualifying for a construction loan. Most construction loans are issued by banks rather than mortgage companies, as the bank will hold on to the loan until the project is complete. Not all banks offer construction loans. Among those that do, interest rates, terms and fees can vary widely. They have stricter underwriting requirements, require larger down payments and have higher fees because of the ongoing inspections required during the construction phase.

If you have excellent credit, can afford a substantial down payment and have an adequate financial cushion to see you through unexpected delays and cost overruns, a construction loan can finance building your dream home. Janet Berry-Johnson is a writer at MagnifyMoney. You can email Janet here. Casey Hynes is a freelance journalist and brand content writer focusing on fintech, AI, cybersecurity, blockchain, and how technology is influencing communities and reshaping the way we live.

Hynes graduated from Columbia Journalism School in and worked at Roll Call before moving overseas and launching her freelance career. You can find her work at caseyhynes. Buying a home became more expensive this year but the good news is not by much. The Federal Reserve raised its benchmark interest rate earlier this year, a move that consumers sometimes associated with changes in mortgage rates.

However, the Fed rate has less influence on fixed-year mortgages than you might think. The Federal Reserve benchmark rate primarily affects loans and lines of credit influenced by the prime rate.

This means that adjustable-rate mortgages that are approaching reset and home equity loans and lines of credit are susceptible to fluctuations along with the Federal Reserve. Keep your eye on the year Treasury note. This note represents the expected long-term Treasury yield, and it influences not only the Federal funds rate but interest rates on a number of financial products, mortgages included. The Federal funds rate can influence Treasury yields, but it does not directly impact it, according to Pete Boomer, head of mortgage protection for PNC Bank.

So far in , increases in the Treasury yield rate have influenced the mortgage market this year. Stirling added that the other factor that is currently influencing the cost of homebuying is low real estate inventory, which is driving up valuations for available properties. The prospect of higher interest rates motivates some buyers to become more aggressive in their home searches.

Gorman said that people who have been considering purchasing a home but have been on the fence may take a more proactive approach in higher rate environments. But lower approval amounts may not be a bad thing. Buyers sometimes make purchase decisions based on the maximum amount for which they can qualify, rather than based on what makes sense for their budgets, which can lead to long-term financial strain.

Instead, he recommended meeting with a loan officer and finding out your borrowing ability, then beginning the search from there. Yes, they are higher than last year.

Rates are still relatively low, as we noted before. Stirling said that the lower rates are, the more compressed payments become. In other words, the increase in monthly payments may not be as substantial as borrowers fear. Boomer said rising interest rates could encourage borrowers to look at products they might not otherwise have considered.

Rather than choosing a year fixed mortgage to lock in a low rate, they might explore hybrid adjustable-rate mortgages also known as ARMs or low down-payment options that have been introduced to the market in recent years.

Hybrid ARMs typically include low introductory rates before the variable rate period begins at three, five, seven or 10 years, depending on the loan structure, Stirling explained. Boomer noted that products from Fannie Mae and Freddie Mac , as well as those created by lending banks, may offer attractive alternatives to traditional fixed-rate mortgages for some borrowers. Even with interest rates increasing, you may be able to find a better-than-average offer, according to Kapfidze.

The key to making the right buying decision is education. Stirling recommended getting in touch with a loan officer early on to determine your options. Sellers, too, will need to decide how they respond to this shift in the market. If buyers move quickly to purchase homes before interest rates rise further, sellers may find themselves able to move their property quickly.

Kapfidze describes this as a lock-in effect. When rates rise, some owners opt to stay in their homes rather than risk paying more for a new house. Kapfidze said that instead of selling, some homeowners will apply for home equity loans or lines of credit and improve their existing houses.

Knowing this, lenders may offer competitive terms on home equity products, so sellers should consider a variety of offers before deciding which to accept. Buyer or seller, the consensus among these experts was to maintain perspective and focus less on short-term increases and more on the long-term implications of your buying and selling decisions.

This article may contain links to LendingTree, which is the parent company of MagnifyMoney. Casey Hynes is a writer at MagnifyMoney. You can email Casey here. Looking to borrow against the equity in your home? Maybe you have heard the terms home equity loan and home equity line of credit HELOC before and wondered what the difference really is. This article will compare the two types of borrowing and take you through the pros and cons of each one. With a home equity loan, you borrow a lump sum of cash using the value in your home as collateral.

The loan will have a fixed schedule for repayment, usually lasting between 5 and 15 years. They often have a fixed interest rate as well, though adjustable rate versions are available.

Within this time, you borrow only what you need as you need it, though some banks do set a minimum withdrawal. You can make interest-only payments only on the amount you choose to borrow or pay more to start contributing towards the principle. The two types of borrowing do have two major things in common: They are backed by the equity in your home, and there are no restrictions on what you can do with the cash.

To calculate your home equity, start with the valueof your house from an appraisal, if available and subtract the amount remaining on your loan. LendingTree is the parent company of MagnifyMoney. Since the loans are backed by your home equity, the interest rates are usually lower than for unsecured forms of credit like credit cards or personal loans.

You can make improvements to your home, pay for a vacation or put your kids through college. However, Brett Anderson, a certified financial planner and president of St. If you have a HELOC or a home equity loan and a regular mortgage, this limit applies to the combined amount of both loans.

This limit is lower than it was previously. Given the current economic environment of rising interest rates, one of the main benefits of a home equity loan is having a fixed interest rate for the term of the loan — you get a lump sum upfront and have the same steady payment, even if the Federal Reserve continues to hike rates.

That makes a home equity loan easier to budget for, said Anderson. A home equity loan does have some drawbacks. A home equity loan also has the same sort of closing costs as a regular mortgage. The rate the lender offers you for a home equity loan depends on your credit score.

You get to withdraw the cash when you need it and only pay interest on the amount you use — however, be aware that most lenders require a minimum withdrawal at the closing. HELOCs can have lower upfront costs than home equity loans, with some lenders offering to pay for closing costs.

Key said if you are willing to base your line of credit off the tax appraisal value of your house, most lenders will do a HELOC without a new appraisal. The major downside of HELOCs is that they use a variable interest rate pegged to the prime rate, which is set to go even higher this year.

Equifax data shows that interest in HELOCs is going down, which Key attributed to both the tax changes and the rising interest rates. He said many of his customers are choosing to refinance to combine an existing first mortgage with a HELOC into one loan.

When choosing between a HELOC or a home equity loan, experts say it is important to consider why you need the money: Is it a set project or a variable need? Going with a home equity loan instead of a line of credit is usually the best choice to pay for a specific plan, like remodeling a kitchen or buying a vacation house. A HELOC is generally a better choice if you need some added cash but not a fixed amount or fixed timeline.

A cash-out refinance is designed to improve on the terms of an existing mortgage and provide additional cash at the same time. A cash-out refinance is a good option if you need money and at the same time want to improve the terms of your current mortgage by securing a better interest rate or converting an adjustable-rate mortgage to a fixed-rate one.

But be mindful of the fees involved, which can be high depending on the circumstances. Key has recommended these to a lot of borrowers at the moment who need big chunk of cash for a project like a renovation or putting a pool.

Any decision to borrow against the equity in your home should not be taken lightly. The overall volume of both home equity loans and HELOCs has declined since the financial crisis, when falling property prices burned some borrowers who had borrowed too much against the equity of their homes.

If you need cash and choose to use your home as collateral, a home equity loan is generally the best choice for financing a project with a set cost. A HELOC provides more flexible access to money, but rising interest rates will make these a more expensive choice in the coming year. Pamela Boykoff is a writer at MagnifyMoney. You can email Pamela here.

Many homeowners look to home equity lines of credit HELOCs to fund home improvements, pay off high-interest debts and cover emergency expenses. But this type of loan, which allows a property owner to borrow against the equity in the home, can be difficult to get — especially when the property in question is an investment property.

They may come in the form of a primary mortgage used to buy or refinance the property, a HELOC or a home equity loan. Of those, the HELOC is unique in that it acts more like a credit card that is collateralized by your home. Like a credit card, the lender approves you to borrow up to a certain amount, then you borrow against the available credit when needed.

As you repay the amount borrowed, your available credit is replenished. And you only pay interest on the money that you actually use. If you stop making mortgage payments and the property goes into foreclosure, when the property is sold to pay off your debts, your primary mortgage will be paid off first. Just keep in mind that the bar for approval may be set higher than it would be if you were applying for a mortgage to purchase an investment property or a HELOC on your primary residence.

While there are many mortgage programs available to help borrowers with credit troubles, borrowers seeking a HELOC on an investment property will likely need good credit to get approved. DTI measures your ability to manage your debt payments by comparing your monthly debt payments to your overall income.

To calculate your DTI, divide your monthly recurring debt payments by your gross monthly income. To qualify for a HELOC, you need to have available equity in the property, meaning the amount you owe on the first mortgage is less than the value of the property. Banks typically set a maximum loan-to-value LTV limit for how much you can borrow. Smith says a lender considering a HELOC would require more equity on an investment property than they would on a primary residence.

Equity increases when a you pay down the mortgage, or b the value of the property increases. You may be able to make some improvements to the home that will increase its value, but that also requires investing funds into the property. Here are a few you might consider:. A cash-out refinance is the refinancing of your existing mortgage loan.

Your new mortgage will be for a larger amount than your current mortgage, and you receive the difference between the two loans in cash. Getting approved for a cash-out refi also requires having adequate equity in the property. However, the advantage of a cash-out refi, as opposed to a HELOC, is that cash-out refis are generally fixed-rate loans. HELOCs are typically adjustable-rate loans, so if interest rates go up, your monthly payments could go up as well.

Second, personal loans usually have shorter loan terms. A personal loan is usually repaid over two to seven years, whereas a HELOC will generally allow you to withdraw funds for up to 10 years and give you up to 20 years to repay.

There are a lot of potential barriers to taking out a home equity line of credit on an investment property, but a HELOC can be a smart financing tool for a property owner in need of funds to fix up the property or invest in another one. Buying a house is an investment, one that can open opportunities in numerous areas of your life. Not only does it become a home for you and your family, you can also borrow money against the property, creating financial flexibility for a wide range of goals.

When you take out a home equity loan, you receive a lump sum that you repay at a fixed interest rate. What it takes to qualify for a home equity loan.

The benefits of home equity loans and lines of credit. The first is your credit score. Because some lenders are more conservative than others, each will have different credit thresholds for approval. Borrowers will likely need at least fair to good credit to qualify for a home equity product, she says. The second element that needs to be in place is your available equity, which is determined by your existing mortgage balance and the total value of your home.

If you hold other assets with them, they may feel comfortable offering a higher loan or line of credit, he says. Finally, lenders will take your debt-to-income ratio into account. Keeping these as low as possible will boost your chances of approval because a high debt-to-income ratio may raise red flags about your ability to manage another significant payment.

Whether you choose a home equity loan or line of credit depends on your particular circumstances. Depending on how you use your loan, you may qualify for a tax deduction. You may choose to limit your home equity spending based on new tax limitations as well. The Tax Cuts and Jobs Act stipulates that you can only deduct interest paid on a home equity loan or line of credit if you use the funds to renovate, build or purchase the house that secures the loan, according to the IRS. Who home equity loans are best for: Kockos says that home equity loans make sense for consumers who know they need a set amount of cash right away.

David Gorman, a division executive at Bank of America, says a home equity line of credit has become increasingly popular among both lenders and borrowers.

Even consumers who want to lock in a fixed rate can do so on their lines of credit, he explains. This provides some of the security of a home equity loan without sacrificing the benefits of the HELOC.

Knowing that your house is at stake makes it vitally important to think carefully about how you spend your home equity funds. However, paying for nonessential renovations or family vacations leaves you with less money to cover emergencies, not to mention with potentially significant debt that could become difficult to repay.

Look beyond the interest rate. However, there are several other factors to consider as well. One is the fee — how much is the lender charging on top of your monthly interest payment? Another is whether there are rate caps in place to protect you against future interest rate spikes.

Kockos recommends looking at annual and lifetime rate caps to determine which offers provide the best protection features throughout the life of the loan. Some lenders will offer lock and unlock features for their home equity lines of credit. This allows you to secure a portion of your spending at current interest rates but unlock it later if rates drop and you want to secure those instead.

Factoring in servicing features along with rates and protections will give you a full picture of what you can expect from working with a lender. Because the home equity lender has the second lien and therefore carries more risk, their approval thresholds are likely higher.

This means that your chances of qualifying for a home equity product may be lower. However, if you still need access to a large sum of money, you may qualify for a cash-out refinance. In this case, you would refinance your current mortgage for a higher dollar amount that includes the remaining balance on the loan plus additional funds you can use for renovations and other needs. The first step in applying for a home equity loan or line of credit is meeting with lenders.

As with a mortgage, you may be repaying this loan over decades, so you want to make sure their terms and support options work for your needs. The right lender can help you determine how much to borrow and how to maximize the opportunities associated with home equity borrowing. Shen Lu is a personal finance reporter at MagnifyMoney. Her work examines the intersection of politics and consumer finance.

She frequently writes about financial challenges that women face. Shen Lu recieved her master's degree in journalism with a focus on business and economics reporting from Northwestern University's Medill School of Journalism. Demand for housing is on the rise as the economy continues to soar and job opportunities increase. At the same time, housing supply is down in many parts of the country and mortgage rates are at a seven-year-high, averaging at 4. If you can get preapproved for a mortgage before you put in an offer on a home, it will give you an edge, especially if you are in a highly competitive market.

Benefits of shopping around for mortgage offers. A mortgage preapproval is essentially when a lender looks at some of your financial information, credit history and employment record, and determines you are eligible for a loan of a certain amount. They will tell you how much you have been preapproved for and also what your mortgage rate will be. At this point, you can choose to lock in your mortgage rate , or wait to compare their offer with preapprovals from other lenders.

When you have a preapproval, a lender is telling you they are almost certainly going to qualify you for a loan. And when you are competing against other buyers for the same home, that document tells the home seller that you are a reliable candidate.

A preapproval can also be helpful to you and your real estate agent. The lender will preapprove you for a certain loan amount, so you will know exactly what you can afford. Your real estate agent then has a good idea of what properties to show you based on your affordability and preferences. There is no guarantee that the borrower will get a final approval.

Identify at least three potential lenders. Start with your current bank and check offers from a credit union and online lenders as well. That will be enough to satisfy any home seller or their agent. Before there is a property attached to your preapproval, Kapfidze said, you can always switch to another lender. Get your documents ready to go. Many lenders today will ask for documents electronically and you may even be able to upload documents directly through their website.

Different lenders ask for different sets of paperwork, but most lenders require the following documents:. Expect an answer within 24 hours. Most lenders can process a preapproval within 24 hours if the borrower submits all the paperwork on time, said Doug Crouse, a mortgage loan originator with UMB Bank in Kansas City, Mo.

However, that also depends on how quickly lenders move and how timely borrowers provide the needed information. In some cases, the preapproval process could take up to 10 days. If you are preapproved for a mortgage, a lender will issue a letter stating the estimated loan amount and mortgage rate you qualify for based on your financial conditions.

Once you have a preapproval letter in hand, you can start searching for homes within your price range. Getting preapproved will result in a hard pull on your credit, which could make a minor dent in your score.

If you get multiple mortgage applications in a short period of time — 14 to 45 days usually — it will only count as one hard inquiry on your credit file and should not damage your score significantly at at all. Your debt-to-income ratio DTI is how lenders determine what percentage of your monthly income is going to be needed to cover your monthly debt obligations, including your potential mortgage payment.

It will just come with a higher mortgage rate and cost you more money over the lifetime of the loan in interest charges. Do all that you can to improve your credit score before applying for a mortgage. There are other mortgage options that accept a lower credit score. For instance, someone with a score of may qualify for an FHA loan. We have a list of loan options for borrowers with poor credit here.

These terms are often used interchangeably in the mortgage business but they can mean very different things. Pre-qualification is typically a prerequisite of a preapproval. Lenders may ask prospective borrowers to fill out a pre-qualification form, where a loan officer will gather a few details from you face to face or online, including your income, assets, debts and credit.

Based on the preliminary information, they estimate the size of a loan they may qualify you for. Because at this stage lenders will not verify any information about you, there is typically no hard credit pull required.

Lenders may issue a pre-qualification letter indicating what your home purchase limit is. However, pre-qualification is not as serious as a preapproval, and many home sellers will want to see a preapproval when they review your offer. This is why preapproval should be done before house hunting. Just like buying anything else, you would want to shop around for a mortgage, because the first offer may not be the best offer.

MagnifyMoney is owned by LendingTree. Crouse recommended borrowers check with two or three lenders to make sure they are getting the best deal in rate and costs.

Alternatively, you can use this online tool , which will match you with multiple mortgage lenders, to compare quotes before applying for a preapproval. Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at shenlu magnifymoney. Aja is a writer and blogger based in Chicago who covers topics on personal finance and entrepreneurship.

She writes regularly on her blog, Principles of Increase, and various other web outlets. Refinancing a home is very similar to getting a mortgage, but you might be wondering how long the process might take. If you have time-sensitive goals, knowing average refinance timeline for each stage could help you with planning. According to a recent report by Ellie Mae , the time to close on a home refinance has decreased significantly over the last few months.

As of February , the average time to close on a home refinance loan was 37 days, down from 50 days in October Granted, closing times vary by loan type i.

FHA, conventional VA, etc. Jason Lerner, area development manager and mortgage broker at George Mason Mortgage, LLC, said that refinancing could be even faster if there are no delays or complications.

There are many variables that come into play that could affect the timeline for your home refinance. One variable in the timeline will be how responsive you, as the loan applicant, are with providing and verifying information as requested by the lender. The other variable is how responsive your lender is and whether or not there are issues or complications with your application. The good news is that you can control your level of responsiveness and communication to help the process go as smoothly as possible while minimizing delays.

However, you cannot control how the bank handles their internal processes. Here are the steps involved in most home refinance loans, along with how long you can expect them to take barring delays, problems or issues. Some of these stages can overlap or occur simultaneously.

Preparing to refinance your home loan comes down to knowing your objective so you can narrow down a loan type, amount and potential repayment schedule. This is an important step. Refinancing your home just because you can is not a good idea. Create a list of financial goals, amount of money it will take to reach them along with a budget that includes your refinance scenario. Home refinance costs more below should also be considered in this equation.

Though the equity in your home is yours, accessing it still costs money. If possible, fare on the conservative side when it comes to determining the loan amount and type for your home refinance. There are many options when it comes to refinancing your home. You should become familiar with each so you can choose the best one for your needs. There are ups and downs for each kind of mortgage, but ultimately, you need to choose the product that will help you meet your financial goals.

The terms offered will be based on a few things like how much your home is appraised for, the maximum loan-to-value a lender will offer, current market interest rates and your personal credit profile. If you are especially concerned with how long it will take to refinance your home, you can make this a part of your research.

As mentioned before, financing your home is no small feat and it does come with a price tag. You should know upfront about the fees and costs related to a home refinance, as it should help you determine whether or not this is a move you actually want to make.

Think about how much you paid to close on your original mortgage loan to anticipate your closing costs this time around.

You can use a home refinance calculator so you can see the impact of refinancing your home when it comes to interest, monthly payments, tax deductions, total mortgage cost, etc. Here are some home refinance costs you should know about:. Costs could vary by state and lender, so compare these fees on your Loan Estimate see below as you look at multiples lenders.

Most lenders will allow you to apply for your home refinance online. To streamline your application process and get the best rates, you can apply to several lenders at once. This way, you can explore the best rates available while having lenders compete for your business.

If all of your refinance applications are made within a day time period, the inquiries will not affect your score while you are shopping for rates. Be prepared to provide demographic information about yourself and co-borrower, along with information about your property, original loan and more.

Your lender will also eventually ask for additional proof to support the information you provide in the application. This would be a good time to start gathering this documentation up. Once the lender has processed your application and verified your information, they will provide what is called a Loan Estimate LE. By law, they must submit this loan estimate to you within three business days of receiving your completed loan application. The Loan Estimate form is a standardized template that clearly outlines the home refinance terms the bank expects to offer you, should you decide to go forward.

The bank has not yet approved or denied your refinance loan at this point, and they may ask you to sign the LE as a record of receipt on your end. Some lenders may lock your rate as part of issuing the Loan Estimate, but this is not always the case.

You can check the top of your Loan Estimate document on the first page to find out if your interest rate is locked, along with when this rate will expire. Once this information is provided, the processor will go on to order your credit report, home appraisal and payoff amount from current lender. This is where an appraiser will come to your home and determine its value. They will be dispatched by the bank and come view the property, look up comparable properties nearby and furnish a report with their findings.

At this stage, the lender is putting all the pieces together — the appraised value of your home, your personal financial situation along with your predicted ability to repay the loan on time and as agreed. This risk analysis can take time and may require additional information. You should be ready to provide additional information to your loan processor, if needed.

Also, your employer could be contacted to verify your salary and employment status during the underwriting phase. The bank can rescind this offer if there is an significant change in your personal financial situation as well. It will outline the final terms of your refinance loan. This three-day timeline is designed to give you enough time to compare rates and ask your lender questions about your loan.

For example, if your closing disclosure varies greatly from your Loan Estimate, this is time to get clarification as to why. You can also ask to review your closing documents before you get to the closing table. Your lender should be able to provide an electronic version so you are aware of what you would be signing at closing. If you need help staying organized throughout this process, you can use a closing checklist to help you keep track of each stage of the closing process.

At this stage, you will sign all the required documentation to complete your home refinance. You should bring your Closing Disclosure with you to make sure your the terms you were quoted are on par with this document. Sometimes your loan closing will be at an office with a closing agent from a title company that facilitates the entire process.

You should bring proper identification because there may be a notary present who requires a valid ID to notarize your signature. You can start capturing those savings as soon as your refinance is complete and funds are disbursed. You will also need to be responsive when it comes to requests for information. Though there are a number of variables that can influence the refinance timeline, your responsiveness and preparedness will help move things along much faster. Aja McClanahan is a writer at MagnifyMoney.

You can email Aja here. Sarah Li Cain is a content marketing writer based in Jacksonville, Florida. She covers finance, real estate and B2B topics. Her work has appeared in Credit Karma, Wordpress and Transferwise. Airbnb hosts who list their primary residence and are interested in refinancing an existing conforming loan on that home. Of course, it always pays to compare interest rates and other costs — if you can afford to wait, other lenders may join in with even better offers.

John Moffatt, head of loan origination at Better Mortgage, says borrowers who have at least one year of Airbnb income claimed on their tax return and proof of income from Airbnb qualify. You may also be asked to submit utility bills. Of course, the actual rate you get depends on a number of factors including your credit history, debt-to-income ratio and loan term. Borrowers must show a two-year history of rental income on their Schedule E. Fannie Mae and Freddie Mac are government-sponsored enterprises that buy and sell residential mortgages.

Better Mortgage, Citizens Bank and Quicken Loans have their own agreement with Fannie Mae so they accept a shorter history of rental income. Cassidy Cain, a mortgage loan officer with US Mortgage, says the partnership with Airbnb could be beneficial to hosts.

In other words, other lenders could accept Airbnb income but may be cautious as to how much weight they give it when considering someone for a refinance. Cain says Airbnb income may make a dent in your debt-to-income ratio.

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here. Holly Johnson is an award-winning writer who is obsessed with frugality, budgeting, and travel. Both of these loans can work if you want to access your home equity, but they do work rather differently.

Cash-out refinancing involves replacing your current home loan with a new one. Like HELOCs, this strategy works for people who have equity in their homes due to paying down their mortgage balances or appreciation of their property.

To qualify for a cash-out refinance, you need to meet similar requirements as you would if you were applying for a first mortgage.