Friday, October 19, 2007

Home equity loans Vs Cash-out refinance

Cashing out through refinance depends on the individual's financial situation and the lender who is approving that. This might vary with the lender and the individual who is applying for that refinance cash out.

There are many factors that affect the way you can take cash. It all depends on how fast you need cash. You should also consider the fee that applies to the option you select, the interest rate and the duration for which you take the loan.

You can select a cash-out refinance or a home equity loan based on these factors.

If you want fast cash then you can go for home equity loans than the cash-out refinance. You might get cash in a week's time if you go for a home equity loan.

If you can wait a little further you can go for a cash-out refinance. The fees charged for the home equity loans are lower than that required for refinancing.

Refinancing might even cost your points. This is something that you have to consider when going for that option. The interest rate for a home equity loan is higher than that of the refinancing since home equity loan is considered as a second mortgage. This is due to the risk involved for the lender.

If you have bought that home loan at a good interest rate then you could go for a home equity loan instead of a refinance. This enables you to retain that good interest rate rather than losing it to refinance.

1 comment:

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