Should I get a HELOC or a Cash-Out Refinance?

• Cash-out refinance loans can be a good option for homeowners looking to access the equity in their homes to pay off debt, consolidate bills, or make home improvements. With a cash-out refinance, you replace your existing mortgage with a new loan for a larger amount, and the difference between the two loans is paid to you in cash.

• Home equity lines of credit (HELOCs) are another way to access the equity in your home. With a HELOC, you get a line of credit that you can draw on as needed, up to a certain limit. HELOCs have variable interest rates, which means that the interest rate you pay can fluctuate over time.

Some things to consider if you are thinking about a cash-out refinance or HELOC in NEPA and the Lehigh Valley:

• Home values have been rising, which means that you may have more equity in your home than you realize. This could make you eligible for a larger cash-out refinance or HELOC.
• Interest rates can make cash-out refinance loans and HELOCs more attractive. However, it is important to remember that interest rates can fluctuate.
• Closing costs can be high for cash-out refinance loans. Be sure to factor in these costs when deciding whether a cash-out refinance is right for you.
• HELOCs have variable interest rates, which means that the interest rate you pay could change over time. 

If you are considering a cash-out refinance or HELOC, it is important to talk to a Fidelity Bank financial advisor to discuss your individual financial situation and determine which option is right for you.