Anna Helhoski

You take out a loan for more than the home is worth, and then you get the difference in cash at closing between the home's value and how much you still own on the mortgage. So that's kind of where your cash out is coming from.

So when we're in an environment where interest rates are really low, this is appealing to people because they can get cash out and at the same time, they're lowering their interest rate, right? But when interest rates have gone up, one, no one's like looking to increase their interest rate, but increasing your interest rate on an even larger loan is kind of like you're just making bad worse there.

So when we're in an environment where interest rates are really low, this is appealing to people because they can get cash out and at the same time, they're lowering their interest rate, right? But when interest rates have gone up, one, no one's like looking to increase their interest rate, but increasing your interest rate on an even larger loan is kind of like you're just making bad worse there.

So when we're in an environment where interest rates are really low, this is appealing to people because they can get cash out and at the same time, they're lowering their interest rate, right? But when interest rates have gone up, one, no one's like looking to increase their interest rate, but increasing your interest rate on an even larger loan is kind of like you're just making bad worse there.

So for a lot of people, cash out refi is not going to be an option. And again, you know, that's going to depend what the interest rate on your primary mortgage is. But kind of broadly right now, cash out refi is just not going to make sense for a ton of people. Yeah, I'm not positive what our mortgage interest rate is, but I want to say it's like 6.9 just for reference, I think.

So for a lot of people, cash out refi is not going to be an option. And again, you know, that's going to depend what the interest rate on your primary mortgage is. But kind of broadly right now, cash out refi is just not going to make sense for a ton of people. Yeah, I'm not positive what our mortgage interest rate is, but I want to say it's like 6.9 just for reference, I think.

So for a lot of people, cash out refi is not going to be an option. And again, you know, that's going to depend what the interest rate on your primary mortgage is. But kind of broadly right now, cash out refi is just not going to make sense for a ton of people. Yeah, I'm not positive what our mortgage interest rate is, but I want to say it's like 6.9 just for reference, I think.

That's not terribly far off the kind of rates we're seeing right now. Something else to consider also is that cash out refis generally have higher interest rates than if you were to just do, say, a rate and term refinance. Because it's that much larger of a loan for the mortgage lender, it's a little more risky. They're going to reflect that in the interest rate you're offered.

That's not terribly far off the kind of rates we're seeing right now. Something else to consider also is that cash out refis generally have higher interest rates than if you were to just do, say, a rate and term refinance. Because it's that much larger of a loan for the mortgage lender, it's a little more risky. They're going to reflect that in the interest rate you're offered.

That's not terribly far off the kind of rates we're seeing right now. Something else to consider also is that cash out refis generally have higher interest rates than if you were to just do, say, a rate and term refinance. Because it's that much larger of a loan for the mortgage lender, it's a little more risky. They're going to reflect that in the interest rate you're offered.

So really, unless it's a low rate environment, cash out refi is probably not it.

So really, unless it's a low rate environment, cash out refi is probably not it.

So really, unless it's a low rate environment, cash out refi is probably not it.

HELOCs and home equity loans have some similarities, have some differences. One big similarity, though, that fits into what I was just talking about is that both of them are types of second mortgages. So it is a separate loan from your current mortgage. That means if there's anything you don't want to touch about your current mortgage, interest rate, term, whatever it is, you don't have to.

HELOCs and home equity loans have some similarities, have some differences. One big similarity, though, that fits into what I was just talking about is that both of them are types of second mortgages. So it is a separate loan from your current mortgage. That means if there's anything you don't want to touch about your current mortgage, interest rate, term, whatever it is, you don't have to.

HELOCs and home equity loans have some similarities, have some differences. One big similarity, though, that fits into what I was just talking about is that both of them are types of second mortgages. So it is a separate loan from your current mortgage. That means if there's anything you don't want to touch about your current mortgage, interest rate, term, whatever it is, you don't have to.

This is just a completely separate loan. That said, each option is pretty different. So home equity loans are pretty straightforward. You just borrow an amount. You get that amount as a lump sum at closing. That's the whole thing. It's got a fixed interest rate that you can pay over as much as 30 years. So you've got this monthly payment. You're just paying it.

This is just a completely separate loan. That said, each option is pretty different. So home equity loans are pretty straightforward. You just borrow an amount. You get that amount as a lump sum at closing. That's the whole thing. It's got a fixed interest rate that you can pay over as much as 30 years. So you've got this monthly payment. You're just paying it.

This is just a completely separate loan. That said, each option is pretty different. So home equity loans are pretty straightforward. You just borrow an amount. You get that amount as a lump sum at closing. That's the whole thing. It's got a fixed interest rate that you can pay over as much as 30 years. So you've got this monthly payment. You're just paying it.

It's more or less how most loans work, right? You borrow the money and then you pay it back. Where home equity loans get tricky is that relatively few lenders offer them relative to other home equity borrowing options. Thinking about the dozens of lenders that we review and research at NerdWallet, Cash-out refinance, I would say, is by far the most common.