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Cash Out Refinance

Very often one mixes up the concepts of cash out refinance and a home equity loan. However, there are several distinct differences between these two types of loans. First, a home equity loan is a separate loan on top of your first mortgage while a cash out refinance is a replacement of your first mortgage. Second, the interest rate on cash-out refinancing is usually, but not always, lower than the interest rate on a home equity loan.

Besides, you have to pay closing costs when you refinance your loan; you don't have to pay closing costs for a home equity loan. Closing costs can amount to hundreds or thousands of dollars.

Finally, it doesn't make sense to refinance a higher amount at a higher rate. If your current mortgage is at a lower interest rate than you could get now by refinancing, it's probably better to get a home equity loan.

Before choosing a type of loan to take, ask a broker for a meaningful piece of advice. At Mortgage Rates NY, we will do what ever it takes to choose the best mortgage or loan alternative for you.

Call us today at (888) 996-9529.