Home Equity Guide

The three ways to tap equity

• ›HELOC. A revolving line of credit you draw from as needed.
• ›Home equity loan. A lump sum with a fixed payment.
• ›Cash out refinance. A new first mortgage that pulls cash out.

Protect your low first mortgage rate

If you locked a low rate years ago, you probably do not want to touch it. A HELOC or home equity loan sits behind your first mortgage and leaves it alone.

A cash out refinance replaces your first mortgage. That only makes sense if the new terms still work in your favor.

When each one fits

• ›Ongoing or unknown costs, like a long renovation. A HELOC gives you flexibility.
• ›One large known cost. A home equity loan gives you a fixed payment.
• ›You also want a better first mortgage. A cash out refinance can do both at once.