Select your age range.
A home equity loan gives you a lump sum of cash at a fixed interest rate. You repay it in predictable monthly installments over a set term, typically 5–30 years. Best for one-time, large expenses like home renovations, debt consolidation, or major purchases.
A HELOC works like a credit card secured by your home. You get a revolving line of credit with a variable interest rate and draw funds as needed during the draw period (usually 5–10 years). Best for ongoing expenses or projects with unpredictable costs.
A cash-out refinance replaces your existing mortgage with a new, larger loan. You receive the difference between the new loan amount and your current mortgage balance as cash. Best when current interest rates are lower than your existing mortgage rate.
A home equity loan provides a one-time lump sum at a fixed interest rate, with predictable monthly payments. A HELOC is a revolving line of credit you draw from as needed, typically with a variable rate. Choose a loan for one-time expenses and a HELOC for ongoing or unpredictable needs.
Most lenders require you to retain at least 15–20% equity in your home after borrowing. If your home is worth $400,000, you'd generally need to owe $320,000 or less on your mortgage to qualify, though specific requirements vary by lender.
A formal application triggers a hard credit inquiry, which can temporarily lower your score by a few points. Most lenders let you prequalify with a soft inquiry that doesn't affect your score, so you can compare offers without impact.
You can use the funds for almost any purpose — home renovations, debt consolidation, education expenses, medical bills, or major purchases. Using the money for value-adding home improvements may also make the interest tax-deductible.
Under current IRS rules, interest may be deductible only when the funds are used to buy, build, or substantially improve the home that secures the loan, and only if you itemize deductions. Consult a tax professional for your specific situation.
Approval and funding typically takes 2 to 6 weeks, depending on the lender, property appraisal, and how quickly you provide required documents. Some lenders offer faster digital-only processes that can close in as little as 5 to 10 business days.