Cash-Out Refinance vs Home Equity Loan
Which is better for accessing your Bergen County home equity? Complete side-by-side comparison with decision framework.
NMLS 1577754 • Licensed in NJ, NY, PA, CT, MD, OH, GA
Side-by-Side Comparison
| Feature | Cash-Out Refinance | Home Equity Loan |
|---|---|---|
| What It Is | Replaces first mortgage | Second mortgage (2nd lien) |
| Number of Payments | One monthly payment | Two payments (1st + 2nd) |
| Interest Rate | 6.5-6.75% (first mortgage) | 8-10% (second mortgage) |
| Closing Costs | $8K-$25K (2-5% of loan) | $500-$2,000 |
| Max Amount | 80% LTV | 85% CLTV |
| Timeline | 30-45 days | 2-4 weeks |
| Best If | Current rate high (6%+) | Current rate low (3-4%) |
When to Choose Each Option
Choose Cash-Out Refinance
- Your current rate is 6% or higher
- You want one simplified payment
- Need large amounts (>$100K)
- Want fixed rate below 7%
- Planning major home improvements
Choose Home Equity Loan
- Your current rate is 3-4% (locked in 2020-2021)
- Want to preserve low first mortgage rate
- Need smaller amounts ($25K-$75K)
- Want lower closing costs
- Need funds quickly (2-4 weeks)
Not Sure Which Option Is Right?
Get personalized recommendations based on your current mortgage rate, equity, and financial goals.
Jimmy Joseph MBA • NMLS 1577754 • jjoseph@cmghomeloans.com