A home equity line of credit (HELOC) provides borrowers with an open-ended loan, or access to low-interest credit with no fixed end date, that homeowners can use as needed. A home equity loan, on the other hand, is an installment loan that pays the borrower the entire loan amount upfront and requires fixed monthly payments. Both are secured by your home’s current value minus the amount of outstanding debt owed on the property. A HELOC best suits those who want access to cash over a period of time, rather than one large lump sum like a home equity loan offers. 

 

HELOCs and home equity loans essentially function like a second mortgage, whereas a refinance means paying off your current mortgage with a new mortgage loan, often locked in at a lower interest rate.