Best Cash-Out Refi & Home Equity Loans 2017

We review and compare the Best Cash-Out Refinance and Home Equity Loan providers. Get access to your equity today!

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Home equity loans, also called second mortgages, allow homeowners to borrow money by leveraging the amount of equity they’ve accumulated in their homes. The interest on these loans is tax-deductible up to $100,000. Home equity loans are divided into fixed-rate loans and home equity lines of credit (HELOCs).

Fixed-rate loans provide a single, lump payment to the borrower, which is repaid in fixed monthly payments over a set period of time. HELOCs are variable-rate loans that work a lot like a credit card. A maximum loan amount is determined, and the borrower can take out money against that credit line, as needed. HELOCs are divided into two periods—the draw period, in which you draw funds and only pay for the interest, and the repayment period, during which you repay both the principal and the interest. They have variable interest rates, based off an index rate with and additional markup that’s subject to your credit profile.

Either type of home equity loan can be an excellent way to obtain funds for home improvement, pay off and consolidate high-interest debt, or finance future earnings potential by paying for college or launching a small business. When choosing a lender carefully consider the terms, repayment plan, interest rates (some lenders have caps), and closing costs. If you take out a HELOC, another factor to think about is a conversion clause which essentially turns part of your it into a fixed-rate loan.

The main issue with home equity loans is maintaining a cycle of debt, in which borrowers spend, borrow, and then continue to spend irresponsibly. Additionally, defaulting on a home equity loan could result in foreclosure, since they’re secured by your home. Finally, with HELOCs, watch out for initial interest “teaser” rates, prepayment penalties, and balloon payments at the end of the draw period.

Top 7 Companies

#1
LendingTree
Our Partner
9.6 / 10
  • Our #1 Choice, A+ BBB Accredited Company
  • Rates as low as 4.09% APR
  • Make your home improvements that add value to your home
  • Get cash for a large purchase
  • Pay for college
  • Consolidate debt
  • When banks compete, you win!
#2
SoFi
Our Partner
9.5 / 10
  • Cash-Out Refinance from SoFi - Turn your home equity into cash.
  • Perfect for high-interest debt consolidation, home renovations, & more.
  • Access up to 65% LTV for any purpose.
  • Payoff student debt & get up to 80% LTV
  • Fast: Close in less than 30 days 
  • No Fees, No Catch! 2 Min Pre-Qualificaiton - No impact to your credit
#3
Loan Depot
Our Partner
9.5 / 10
  • Loan from $25,000 up to $250,000
  • Flexible terms of up to 15 years
  • Does not affect your low 1st mortgage rate
  • Fast closing in just days
  • Cash out up to 90% loan to value
  • A+ BBB Accredited
  • Equal Housing Lender

 

#4
JG Wentworth
Our Partner
9.3 / 10
  • Refinance to Take Cash Out
  • Super low refinance mortgage rates
  • A+ rating with the Better Business Bureau
  • Experienced loan officers to guide you
  • Over $8,000,000,000 Dollars in Loans Funded
#5
Rate Marketplace
Our Partner
9.3 / 10
  • A+ BBB Accredited
  • Equal Housing Opportunity Lender
  • Multiple types of home equity loans offered
  • Large network of lenders to choose from
  • Get up to 5 free quotes
  • Easy Eligibility Requirements
#6
Rocket Mortgage
Our Partner
9.0 / 10
  • Enhance Your Life with a Cash-Out Refinance from Rocket Mortgage
  • Eliminate High-Interest Credit Card Debt
  • Pay for College Tuition or Buy a Vacation Home
  • Save time & avoid paperwork by sharing your finances online. 
  • #1 in Client Satisfaction by JD Power 6 Years in a Row!
#7
Quicken Loans
Our Partner
8.9 / 10
  • Enhance Your Life with a Cash-Out Refinance from Quicken Loans
  • #1 in Client Satisfaction by JD Power 6 Years in a Row!
  • A+ Rating with the BBB
  • Eliminate High-Interest Credit Card Debt
  • Pay for College Tuition or Buy a Vacation Home
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Best Home Equity Loans: Summed Up

RankCompany NameStrengths
1LendingTreeBest Overall
2SoFiServices, Loan Details
3Loan DepotQualifications
4JG WentworthAccreditation, Customer Support

How We Compare Home Equity Loans

Select 2 home equity loans companies to compare
vs
Services - 20%
Loans - 15%
Qualifications - 20%
Accreditation - 15%
Loan Details - 20%
Customer Support - 10%

Customer Questions & Answers

What is a home equity loan?

A home equity loan is a form of loan which uses the equity of a home as collateral. Borrowers typically use these loans as a means of covering critical expenses. These can include tuition costs and out-of-pocket medical bills.

Are home equity loans tax deductible?

The interest from a home equity loan may be tax-deductible. In order to qualify, the loan must be secured by your home and must have been obtained after Oct 13, 1987. The total deduction limit depends on what the loan money is used for. Loans used to buy, build, or improve your home have a $1,000,000 limit. Loans used for other purposes have a $100,000 limit.

What is a cash-out refinance?

Cash out refinancing is the refinancing of a pre-existing home mortgage that allows the borrower to turn built-up home equity into cash. If the amount refinanced is greater than that of the original mortgage, the borrower will then be given the cash difference.

What can you do with a home equity loan?

There are several uses for home equity loans. To name a few, they can be used for renovating a home, financing education, generating retirement income, paying off previous debt, or for investing.

Should I get a home equity loan?

The pros and cons of home equity loans depend on what you intend to do with the money. With home improvements and major, necessary purchases the answer is almost always yes. If you intend to use the money as retirement income, for investments, or to pay credit card debt then the answer is more complicated.

Using a home equity loan to finance home improvements, like updating kitchens and bathrooms, or rebuilding a garage or basement, can increase the value of your home in the long run and therefore the overall equity. Paying off high interest credit cards or loans with home equity might seem a good idea on the surface, but it doesn’t get to the root of the problem of how this toxic debt is accumulated in the first place. Given the fact that debt is so easy to incur, you can effectively just be digging a bigger hole for yourself.

How does a home equity line of credit work?

A home equity line of credit advances you a credit line using your home equity as collateral. You can then borrow up to the credit limit during a set time called the draw period. Monthly payments are usually just interest and the whole loan becomes due at the end of the draw period.

How big of a home equity loan can I get?

Typically, lenders will allow you to borrow between 80%-90% of your home’s equity. So if your home is worth $300,000 and your mortgage balance is $150,000, you have $150,000 in home equity. Banks might offer you loans of $120,000 - $135,000. These are general figures not including taxes and associated fees.

What is home equity?

Home equity is the portion of your home that you actually own. As you pay off your mortgage, the value of ownership you've built up in the house increases. For most people, their home equity is their largest source of net worth.

What is a HELOC?

A HELOC is a Home Equity Line of Credit, which is when you borrow money using your home equity as collateral, or a guarantee for your loan. Your lender sets a borrowing limit, which is used as a line of credit: using the money, paying it off, and then borrowing again as needed.

How does a home equity loan work?

A home equity loan uses your home equity as collateral for the loan. The lender will determine the maximum loan amount based on the value of your property, and you make monthly payments until the loan is paid off. The value of the property is established by an appraiser from the lending company.

Resources From Our Editors
Best Home Equity Line of Credit
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The 4 Steps to Taking out a Home Equity Loan
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Home Equity Loans: Comparing Your Options
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How to Qualify for a Home Equity Loan With Bad Credit
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How to Find the Best Home Equity Loan
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Requirements For a Home Equity Loan
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8 Tips for Getting the Best HELOC Rates
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Reverse Mortgage vs a Home Equity Loan: Weighing Your Options
Home equity loans vs reverse mortgages Generally speaking, a reverse mortgage works better as a steady, long-term source of income, whereas a home equity loan is best if you need a lump sum of short-term cash that you can repay. Both...
7 Things You Should Know Before Taking Out a Home Equity Loan
A home equity loan is a form of loan which uses the equity of a home as collateral. Borrowers typically use these loans as a means of covering critical expenses. These can include tuition costs and out-of-pocket medical bills. With so...
The Pros & Cons of a Home Equity Loan
What is a home equity loan? A home equity loan is a form of loan which uses the built-up equity of a home as collateral. Borrowers typically use these loans as a means of covering critical expenses. Building off those “critical...
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