 TITLE: Is Cash-Out Refinancing Better Than a Home Equity Loan? CONTENT: Comparing a Cash-Out Refinance With a Home Equity Loan\n------------------------------------------------------\nBoth cash-out refinancing and home equity loans can help you turn the equity you've built in your home into money you can use today. Many people use these forms of financing for home repairs, maintenance or improvements, or for major expenses, such as a wedding or college costs.\nAlthough there are exceptions, here are some general differences between cash-out refinance mortgages and home equity loans:\nCash-Out Refinance\nHome Equity Loan\n**Replaces Current Mortgage**\nYes\nNo\n**Interest Rates**\nFixed or variable\nOften fixed\n**Repayment Term**\n15 to 30 years\n5 to 30 years\n**Closing Costs**\nYes\nLenders may cover the costs\n**Tax Deductible**\nIf you use the money to improve the home\nIf you use the money to improve the home\nHome equity loans tend to have higher interest rates than cash-out refinancing loans as they're second mortgages, meaning that if you fall behind on payments, the lender will only get paid after the primary mortgage holder gets what it's owed. The higher interest rate may be somewhat offset by the low or no closing costs. But read the fine print on your loan, as some lenders will cover the closing costs but then require you to repay some of the money if you pay off your home equity loan early. END