Home Equity: How to Use It
A refinance pays off your current mortgage and gives you cash based on your equity. These are good for:
l Lowering or locking in your mortgage interest rate
l Getting large sums of money ($30,000 or more)
Home equity loans (second mortgage) are installment loans that are paid out in one lump sum. They’re good for:
l repaying credit card debt
l remodeling projects
l buying a new vehicle
A home equity line of credit works like a credit card – you agree to a pre-set limit and then borrow as you need to, or in the event of an emergency, usually for up to 10 years. It's always beneficial to see where your money is going.