Cash Out Refinance Vs Home Equity Loan Debate - Analyzes The Pros And Cons Of Both

SAN DIEGO, Oct. 14, 2013 /PRNewswire-iReach/ -- is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. The loan borrower advice website is continually providing readers with quality articles and videos on how to go about handling mortgage loans. This is shown in their newest article "Cash Out Refinance vs Home Equity Loan (Key Differences" which explains the pros and cons of a cash out refinancing and a home equity loan. Using this article guide, loan borrowers can resolve the cash out refinance vs home equity loan debate and decide which option is the best setup for their financial needs.

While both home equity loan and cash out refinance loan are directly related to a home's equity, they are different in a few notable ways. The Loan Love article points out the differences with the following statement: "A refi loan is simply a brand-new mortgage that replaces your old mortgage, while a home equity loan is a loan in addition to your existing mortgage. That means that with a home equity loan, you'll still be paying your regular mortgage and you'll also need to pay the monthly payment for your home equity loan."

How these two loan options can benefit loan borrowers is distinct. The main advantage of a cash-out refinance loan is their lower interest rates. Specifically, since a cash-out refinance loan is the primary loan of a loan borrower's home, the interest rates are the same as shopping for any other mortgage loan meaning borrowers can have access to the same low interest rates. On the other hand, the main advantage of a home equity loan also happens to be the biggest disadvantage of a cash out refinance loan: home equity loans have no closing costs, and as a result can end up saving more money than a cash out refinance loan.

That being said, the loan option that would be the better choice is entirely dependent on the loan borrowers as the article clearly points out. "First, if you can't afford a monthly home equity payment on top of your existing monthly mortgage payment, a home equity loan is not for you. What's more, unless you really, really need the money, a refi loan typically doesn't make sense if it means you need to pay a higher interest rate than the rate on your current mortgage. Likewise, if you don't have plans to stay in your home for several years, paying all those closing costs that are associated with a refi loan may not make sense either. And if you've been paying on your home for a long time – say, 20 years of a 30-year mortgage – it may not make sense to refinance either, since you'd be at the point where your payments are being applied mostly to the principal (in plain English, you'd be building equity more quickly)" says the Loan Love article.

Knowing which loan option can be a decisive step for a loan borrower when trying to make use of their home's equity. Luckily, the mortgage calculators at the Loan Love website can help loan borrowers calculate loan payments and closing costs when deciding on a loan. To learn more on the cash out refinance vs home equity loan debate and to avail the mortgage calculators, please visit

Media Contact: Kevin Blue,, 949-292-8401,

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