What's the difference?

[Big Banks]

What is the difference between home refinance loans, home equity loans and home equity lines of credit?

[jbone907]

a refinance loan is basically a loan from another company to buy your house again (you pay off your current loan but pick up a different one in the process). This is usually done to get a lower interest rate.a home equity loan is simply a loan in any dollar amount that is backed by the equity in your home. You can't usually get loans that exceed your equity.a home equity line of credit (or HELOC) is essentially a credit account, much like a credit card, where your "limit" is the amount of equity available in your home. It is better than a home equity loan for situations where you need to make lots of purchases, rather than one big purchase where you know the exact amount. If that was the case, the equity loan would work better than the HELOC.

[cloothe]

In a home refinance loan, you borrow enough money to pay off your old loan (sometimes more). You then have only one loan--the new one--to repay.In an equity loan, you are taking out a SECOND mortgage, any you will have to pay both the new and the old one. But of course, your second loan will be for less money, because you don't need enough to pay off the first loan--it's all new cash to you.An equity line of credit is a loan where you don't take the money right away. All you get is the *right* to write yourself a loan. You are completely approved up to a certain amount, but you haven't received the money yet. People often get equity lines of credit when they know they will need to borrow money, but they don't exactly know the date. This might be for tuition bills or for work you are having done on the house. Like a regular equity loan,. the line of credit is an addtitional loan, so you have to keep paying your first mortgage.I hope this helps. Good luck!!

[summertime]

A home refinance is generally your first mortgage where your take your original mortgage and refinance it maybe adding an amount to it to pay off other bills or do work on your home.A home equity loan is generally a second mortgage, where you get the full amount you borrowed.A home equity line of credit is a loan where a set amount is available and you get funds as you need them.

[alx]

Refinance: When you clear an old mortgage debt by issuing a new one. Go to a new bank and ask for a loan to pay the old. They pay the old one and you continue payments to the new bank maybe in return for a small monthly instalmentHome Equity: When you get a loan and use your equity as collateral in case of default. (let's say you buy a house and they give you a mortgage, it's not yours until you clear your debt)Line of Credit: It's more or less something like the previous one only for smaller amounts. (let's say if you have to fix something of renovate your house)

[matsonb]

home refinance is re-financing an existing mortgage.a home equity loan and line of credit are 2nd mortgages. The loan is a fixed rate, with a set payment. The line of credit is a variable rate, and your payment is based on the amount you use... as you pay it back you can re-use it, just like a credit card.