Refinance vs HELOC: Which Is Better for You?
Homeowners in California and Georgia often choose between a full refinance and a Home Equity Line of Credit (HELOC) when tapping equity. The right choice depends on how much you need, how long you’ll take to repay it, and your current mortgage.
How a Refinance Works
A refinance replaces your existing mortgage with a new one. It can be:
- Rate-and-Term Refinance – changing rate or term only
- Cash-Out Refinance – pulling equity out at closing
How a HELOC Works
A HELOC is a revolving line of credit secured by your home.
- Borrow only what you need, when you need it
- Typically variable interest rates
- Separate payment from your first mortgage
When a Refinance Might Be Better
- Your current rate is high relative to today’s options
- You want one fixed payment, not a separate line of credit
- You’re consolidating multiple debts into your mortgage
When a HELOC Might Be Better
- You need a smaller amount of cash
- You expect to pay it off quickly
- Your current first mortgage rate is already strong
Next Steps: Personalized Refi vs HELOC Comparison
We’ll model both a refinance and a HELOC scenario for your situation in California or Georgia, including monthly payment and total interest over time.