Home Equity Loan:

A home equity loan is a lump sum of money that you borrow against the equity in your home. Equity is the difference between the market value of your home and what you owe on any loans secured by the home, such as a mortgage loan. You can obtain a home equity loan using your home equity as security, generally without paying bank fees at closing. You can use that money to cover a large expense like home improvement projects.

Mortgage Refinance:

A mortgage refinance loan pays off the remaining balance of your existing home loan and replaces it with a new mortgage loan. This is different from a home equity loan because it replaces your existing mortgage with another mortgage instead of being an additional lien on your home. You may refinance your home to borrow additional money for expenses or to receive a lower interest rate. Unlike a home equity loan, there are generally bank fees associated with refinancing.

For more information consult our home equity specialists.