Cash Out Refinance Vs. Home Equity Loan Examined In Loan Love's New Article

SAN DIEGO, Oct. 30, 2013 /PRNewswire-iReach/ -- is a borrower advice website that provides detailed insights into the mortgage industry in an easy to understand 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. Readers can be guaranteed to find only the most relevant news in the mortgage world when pursuing the right loan with Loan Love's many informative articles and guideline videos. An example of one of these articles is their recently released "Cash Out Refinance vs Home Equity Loan (Key Differences)" article which highlights the important factors in the cash out refinance vs home equity loan debate. Before loan borrowers become prompted to buy the next mortgage loan they see, taking time to read the article can help borrowers decide what are the benefits and drawbacks of each loan before hastily making a purchase.

It is important for loan borrowers to understand that even though both a cash out refinance loan and home equity loan are similar in the sense that they tie in with a home's equity, they differ in a few notable ways. The Loan Love article makes a point in separating how the two loans function: "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 exactly each loan can benefit loan borrowers can be seen in two distinct ways. A cash out refinance loan's main advantage is their lower interest rates. In particular, since a cash-out refinance loan is the primary loan use for a borrower's home, the interest rates are generally the same when compared to shopping for any other loan. On the flip side, a home equity loan excels where a cash out refinance loan doesn't: home equity loans have the benefit of having no closing costs, which in the end can help a loan borrower save a lot of money in the long run.

With that in mind, the better option between each loan is still dependent on a borrower's financial capability. The article elaborates more with the following: "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)"

In the end, determining which is the best option comes down to crunching the numbers. Loan Love advises their readers to take their time to shop around and take advantage of mortgage calculators to help them to make the best financial move.

For more information, please read the full guide on

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

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