[Interactive] HELOC vs. Cash-Out

Jan 3
Category | General

We may not be comparing real apples and oranges, but we’re coming pretty close in the home financing industry. And if you’re at all interested in using your home’s equity to access cash, then this comparison is for YOU! 

There are two common ways to get cash from your home—a Home Equity Line of Credit (HELOC) or a cash-out refinance. 

In the current environment, many people want to keep the great interest rate they already have on their home loan, so they automatically choose a HELOC over a refinance. But wait—there’s a big difference that can make the benefits hard to compare at a glance. HELOCs have adjustable interest rates, whereas most home loans are fixed.

So, is it better to use a Home Equity Line of Credit or to do a "cash out" refinance despite a higher interest rate? Find out by watching our helpful interactive video here and by using our comparison calculator.

And, if you’re interested in exploring your options more, please reach out. We are happy to help! Fill out the form below and one of our loan officers will be in touch shortly!

Over the past few years, two trends have emerged in the housing market:

  1. Home renovations have shot up

  2. Inventory of homes available for sale on the market has dropped

A ‘normal’ housing market is defined by having a 6-month supply of homes for sale. According to the latest Existing Home Sales Report from the National Association of Realtors, we are currently at a 4.4-month supply.

This low inventory environment has many current homeowners worried that they would be unable to find a home to buy if they were to list and sell their current houses, which is causing many homeowners to instead renovate their homes in an attempt to fit their needs.

According to Home Advisorhomeowners spent an average of $6,649 on home improvements over the last 12 months. If that number seems high, it also includes homeowners who recently bought fixer-uppers.

A new study from Zillow asked the question,

“Given a choice between spending a fixed amount of money on a down payment for a new home or fixing up their current home, what would you do?”

Seventy-six percent of those surveyed said that they would rather renovate their current homes than move. The results are broken down by generation below.

Are Homeowners Renovating to Sell or to Stay? | Keeping Current Matters

More and more studies are coming out about the intention that many Americans have to ‘age in place’ (or retire in the area in which they live). Among retirees, 91% would prefer to renovate than spend their available funds on a down payment on a new home.

If their current house fits their needs as far as space and accessibility are concerned, then a renovation could make sense. But if renovations will end up changing the identity of the home and impacting resale value, then the renovations may end up costing them more in the long run.

With home prices increasing steadily for the last 6.5 years, homeowners have naturally gained equity that they may not even be aware of. Listing your house for sale in this low-competition environment could net you more money than your renovations otherwise would.


If you're thinking about renovating, contact us today or visit out Renovation Page for more information. 

For the Week Ending December 28, 2018



Please enjoy this quick update on what happened this week in the housing and financial markets.



Early holiday shopping numbers are on track to break season records. However, stocks are still volatile and trending downward, despite the strong consumer spending. 
The reversal in stocks this year has helped mortgage rates improve from October levels. Although the Fed increased policy rates, mortgage rates have improved.
The economic outlook heading into 2019 is concerning investors. As they turn to the safety of bonds for protection, mortgage rates could continue to improve.


Annual home price gains have slowed nationwide, according to Case-Shiller. Even still, prices increased 5.5% year-over-year, holding steady from last month.
The current partial government shutdown may have some effect on mortgages and housing. Flood insurance and tax transcripts could be the most affected.
A recent survey of homeowners showed aesthetic appeal, affordability, commute times and neighborhood character were the top reasons for picking a home.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.


It's that time of the year when most people make resolutions for the new year. If one is your resolutions is to buy a new home, there are some steps you should take to make sure you are in the best state financially to make the purchase. We’ve put together some quick tips to help you keep this New Year’s Resolution.
Start Saving for a Down Payment (Boost Your Savings)
An obstacle for anyone buying a home is saving for a down payment. Many people think that a 20% down payment is required. However, down payment options of 3% are now common! Visit our website here to view our loan options or give us a call at 732.832.2967 to discuss the option that’s best for YOU!
The sooner you start to save, the better.
Here are 10 easy ways to save for a down payment:
1)     Save your raises, bonuses and tax returns
2)     Transfer a fixed amount into a special savings account every month or even every paycheck
3)     Skip vacations for a year
4)     Ask for a raise
5)     Lower your expenses
6)     Sell some of your investments
7)     Get a second job
8)     Borrow from a relative
9)     Get a financial gift
10) Take advantage of special programs - ask us about Down Payment Assistance programs to see if you qualify!
Check your Credit Rating
This one’s important! Your credit score is one of the main foundation blocks of your mortgage application. Simply put, the stronger your credit score, the better your mortgage could potentially be. No matter what your score looks like, there is usually room for improvement. In order to maintain a good credit score, start getting in the habit of these kinds of good credit practices:
· Record your spending
· Keep up with your debt payments
· Don’t go over your credit limit
· Use your credit cards wisely
· Don’t make large purchases (new car, new furniture, etc)
Tame Your Debt
If your looking to buy a home in the near future, it’s important to get your debt in check. Debt has an impact on your credit score. Part of your credit score is about credit utilization, so if you rely too heavily on credit and only make small payments toward your balances every month, you’re considered at higher risk of overextending yourself. Paying these downs will raise your score. A big part of the mortgage approval process is also based on your debt-to-income (DTI) ratio, which measure how much your monthly income goes towards paying off debts. Bottom line, the less debt you have, the more home you will be able to afford.
Find Your Dream Home
Once you’ve got everything in order, it’s time to look for your dream home. First, determine the wants in needs in a new home that you’re looking for. Take into account:
·Number of bedrooms
· Number of bathrooms
·Square footage
· Location
·Local traffic / Public transportation
Get Pre-Approved for a Loan
Remember, it’s VERY important to get pre-approved before you start looking for your dream home. A lender will pre-approve you for a loan based on official proof of items including (but not limited to):
·Your credit score
·Your income/finances
·Tax returns
· Job
·Current debts
A pre-approval gives you a stronger understanding of what you can afford for a home. It also shows the seller that you are a genuine buyer.
If you think you’re prepared and would like to get started, click below to get pre-approved. If you have questions and want to speak to one of our expert loan officers, give us a call today 732.832.2967.

For the Week Ending December 21, 2018


Please enjoy this quick update on what happened this week in the housing and financial markets.



The Fed raised policy rates this week, but lowered the number of expected rate increases for 2019. Mortgage rates were basically unaffected by this rate hike.
Stocks have been routed and fears over a slowing economy have taken over. As investors seek safety in bonds, this has helped mortgage rates improve.
The labor market remains strong though, as jobless claims were only up slightly from the previous week's near 49-year low. Claims were at 214,000 for last week.


Home builder confidence was down slightly in December from November. But indications are still that more builders view sales conditions as good than poor.
New home starts rebounded in November, driven by a surge in multi-family housing. However, single-family housing starts were down to a 1-1/2 year low.
Existing home sales rose unexpectedly in November. Although sales are down 2.3% in the first 11 months over last year, they've increased for 2 months in a row.

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.


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