FHA mortgage refinance, home equity line of credit there are some definite benefits to doing a cash out mortgage refinance. Just make certain that overall you are not going to be spending more money in fees and interest doing a FHA mortgage refinance as opposed to a home equity loan. When you of a cash out mortgage refinance, you are refinancing your entire loan. Let’s say you Ove $300,000 on your home and you want to get $10,000 in cash out. If in refinancing your rate will be the same or higher, then you will be losing on the extraordinary amount of money in fees just to get a $10,000 loan. In a case like that, you would definitely want to go with a home equity line of credit loan. Home equity line of credit loans are better if: you have a large home loan yet only need to cash out of a small amount of equity you need to borrow up to 100% of the equity in your home you want a revolving credit line you want a payoff sooner, or longer than the term than the rest of your mortgage loan on the other hand if you are: Going to refinance anyway wanting to borrow a large percentage of your homes equity refinancing for a much lower home equity line of credit rate Then, a cash out mortgage refinance loan may be best for you.
Of course, the best way to tell is to actually sit down and do the math. These are just guidelines; the real test is in the math. You can consult a refinance calculator and a home equity line of credit calculator and figure out which one wants to save you the most money in the long run. Compare the total amounts you want to spend in interest and fees. If you are planning on a cash out mortgage refinance, make sure that you are refinancing with a low enough rate to justify the fees to refinance. Your loan specialist should be able to help you figure out which one is best for your needs.