Homeownership comes with many advantages, including the ability to tap into your home’s equity. As your property value increases and you pay down your mortgage over time, you build equity that can be accessed to fund various financial goals.
In this article, we’ll explore ways to maximize your home equity by examining three popular programs: Home Equity Line of Credit (HELOC), Home Equity Loan (HELOAN), and Cash-Out Refinance. Each program offers unique benefits depending on your financial situation. Whether you’re looking to fund a major home renovation, build a pool, consolidate high-interest debt, or finance other large expenses, understanding your home equity options can help you make an informed decision about which is right for your specific needs.
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What is a Home Equity Line of Credit (HELOC)?
A HELOC is a revolving line of credit secured by your home as collateral. It allows you to borrow funds as needed, up to a set credit limit, without requiring a full refinance. You can withdraw money during the draw period and repay only interest during this time. Afterward, the repayment period begins, requiring full principal and interest payments. Some benefits of a HELOC include:
- Flexibility to borrow only what you need without refinancing.
- Available for primary residences, second homes, and investment properties.
- Borrowing power up to 95% of your home equity (varies by lender and property type).
- Interest-only payments during the draw period.
- No prepayment penalties or early payoff fees.
- Typically has lower interest rates than credit cards and personal loans.
While some HELOCs come with fixed-rate terms, most HELOCs have variable interest rates, meaning payments can increase over time. Additionally, some lenders may require a minimum withdrawal amount.
Great for: Covering large or ongoing expenses like home improvements, unexpected medical costs, or tuition.
Quick Tip
A HELOC is great for flexibility, but if you prefer predictable payments, a Home Equity Loan might be a better fit.
What is a Home Equity Loan (HELOAN)?
Unlike a HELOC, a Home Equity Loan is a fixed-term, lump-sum loan secured by your home as collateral. You receive the full amount upfront and make fixed payments over time, similar to a traditional mortgage. HELOANs are taken as second mortgages, so there’s no need to refinance your current one. While not as flexible as a HELOC, a Home Equity Loan comes with its benefits:
- Maximize your home equity by accessing cash without refinancing.
- Available for primary residences, second homes, and investment properties.
- Peace of mind with a fixed interest rate and predictable monthly payments.
- Borrowing power up to 95% of your home equity (varies by lender and property type).
- Typically has lower interest rates than credit cards and personal loans.
Great for: Large, planned expenses such as renovations, medical bills, or debt consolidation.
Quick Tip
A Home Equity Loan is ideal when you need a set amount of money and want to avoid fluctuating payments.
What is a Cash-Out Refinance?
A Cash-Out Refinance replaces your existing mortgage with a new, larger loan – allowing you to take out the difference in cash. Unlike a HELOC or HELOAN, which are considered second mortgages, a Cash-Out Refinance completely replaces your current mortgage. Some benefits include:
- Access to a large lump sum of money.
- Available for primary residences, second homes, and investment properties.
- Potentially lower your interest rate or change your loan terms.
- Access up to 85% of your home value (varies by lender and property type).
Since this mortgage replaces your current one, your interest rate will change – potentially higher or lower, depending on market conditions. You will also pay closing costs similar to your original mortgage when opting for a refinance.
Great for: Lowering your mortgage rate or term while accessing cash for major expenses.
Quick Tip
If you’re already considering refinancing, a cash-out option could give you additional funds while restructuring your mortgage.
Which Home Equity Option is Right for You?
While HELOCs, HELOANs, and Cash-Out Refinances all give you access to your home equity, consider the following when trying to decide between them:
- Choose a HELOC if you need flexible borrowing for large expenses.
- Choose a HELOAN if you want a lump sum with predictable payments.
- Choose a Cash-Out Refinance if you want to change your mortgage terms while accessing cash.
Always consult with a licensed mortgage loan originator when exploring your options. Ready to learn more? We can help you compare the costs of borrowing and select the right option for your situation.
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About Acrisure Mortgage
Acrisure Mortgage (formerly FBC Mortgage, LLC) is a Top 10 national mortgage lender headquartered in Orlando, Florida. Licensed in 49 states and supported by more than 19,000 dedicated professionals across Acrisure, we specialize in residential mortgage lending through both retail and wholesale/correspondent channels. Our comprehensive offerings include purchase, refinance, construction and renovation loans—tailored to meet the unique needs of homebuyers, homeowners and partners nationwide.
We are proud to serve as a trusted partner to many of the nation’s largest homebuilders and real estate professionals, with a strong foundation of loyal, satisfied clients. Recognized for our commitment to service, innovation and operational excellence, Acrisure Mortgage has received numerous national accolades, including Top 50 Mortgage Companies, Best in Loan Delivery and Best Place to Work honors.
As part of the Acrisure family, we are backed by a global fintech leader that shares our values of innovation, integrity and service. Together, this empowers us to expand our capabilities, leverage world-class technology and resources, and grow alongside the clients and communities we serve.
All information presented is for educational purposes only and not intended as financial advice. NMLS ID#152859 EHL ©2025.
FBC Mortgage is Now Acrisure Mortgage
FBC Mortgage officially rebranded as Acrisure Mortgage on July 1, 2025. This change reflects the company’s continued alignment with its parent company, Acrisure.
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Maximizing Your Home Equity
Homeownership comes with many advantages. Explore three ways to maximize your home equity: Home Equity Line of Credit (HELOC), Home Equity Loan (HELOAN), and Cash-Out Refinance.
