What is the difference between a home equity loan and a refinance?

A home equity loan and a refinance are two different types of mortgages available in Pennsylvania. A home equity loan is a loan that allows you to borrow against the equity you have built up in your home. The equity is the difference between the value of your home and the amount of money you owe on the mortgage. The loan is secured by the equity in your home, and can be used for a variety of purposes. A refinance is a mortgage used to replace an existing mortgage and is usually taken out when the borrower needs to obtain a lower interest rate, get a lower monthly payment, or to access the equity built up in their home. With a refinance, the borrower pays off the original mortgage and takes out a new mortgage with different terms, such as a reduced interest rate or a lower monthly payment. The main difference between a home equity loan and a refinance is that with a home equity loan, the loan is secured by the equity in the home and can be used for many different purposes, while with a refinance the loan is used to pay off an existing mortgage and take out a new mortgage.

Related FAQs

How do I know if I have a good mortgage loan offer?
What is a mortgage-secured line of credit?
What are the pros and cons of taking out a mortgage?
How can I protect my rights as a mortgage borrower?
What documents do I need to provide to a lender to qualify for a mortgage?
What is a mortgage?
What is the difference between a rate lock and a float-down?
What are the risks associated with a mortgage?
What are the differences between a mortgage broker and a lender?
What is the maximum mortgage amount I qualify for?

What is the difference between a home equity loan and a refinance?

Related FAQs

Related Blog Posts