Unfortunately, at this time LoanVerify does not offer HELOCs (Home Equity Line of Credit.) If you are in need of a HELOC, please contact us and we will provide a few recommendations to Credit Unions and Banks that offer HELOCs.
Below is a side-by-side comparison chart to help understand the differences between a typical HELOC and a cash-out refinance:
|Some take 60+ days to complete||Some take 20 days or less to complete|
|Adjustable rate tied to the Prime Rate||Fixed rate|
|Some have a Balloon Payment – balance outstanding is due in full in 5, 7, or 10 years
Some require principal & interest payments amortized over a term after initial draw period
|No Balloon Payment – balance is paid down via consistent monthly payments spread across the loan term|
|Some have monthly payments that are interest only payments
Some have monthly payments that include principal & interest
|Principal & Interest payments (principal balance does decrease)|
|Can withdraw money and pay down balance, typically as needed. Some limit the number of years allowed to withdraw money||One time withdrawal to get money as cash-back at settlement|
|Issuer can freeze, under certain circumstances, the line of credit preventing money from being withdrawn||Once settlement has concluded, the loan terms cannot be changed|
*If a HELOC has an outstanding balance and a refinance is used to payoff a first mortgage and
a HELOC, with specific loan programs the interest rate will be higher because the HELOC was
not opened at the same time as the first mortgage.