is a home equity line of credit the same as refinancing a mortgage?

Question by toolate: is a home equity line of credit the same as refinancing a mortgage?
if i just needed to consolidate bills and pay off some debt which would be the best way to go?

Best answer:

Answer by gretskins
no. home equity loans borrow money against the rising value of your home. if you bought your home for 100,000 and it is now appraised at 150,000, your equity in the home is 50,000. you are borrowing that.

What do you think? Answer below!

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8 Responses to is a home equity line of credit the same as refinancing a mortgage?

  1. Phoenix says:

    Completely different. In your case, I suggest the HELOC. I don’t recommend combining general consumer debt into your home debt.

  2. Jeff says:

    No, it is not the same.

    Home equity loans are designed to enable homeowners to make significant improvements to their property. While not everyone uses the money like this, if you use it to pay down debt, you’ll be borrowing from one source to pay off another. If you actually need to make improvements to your home, then your HE loan won’t be there.

    Plus, a home equity loan is best used for your home anyway. If you borrow $ 20k and make improvements, you will most likely add at least $ 20k of value to your home. Therefore, you’ve simply repurposed the money and improved your quality of living.

  3. gtofinancial.tomvoli says:

    A home equity line is normally a second mortgage and is a higher rate than the first mortgage. Determining whether a refinance of the first is more beneficial than an equity line second is really a matter of your own goals and opinion. The benefit of refinancing the first is that you can consolidate the debt at a lower rate and it now converts to tax deductible if it is primary mortgage interest.

    Here is some additional info. Hope this helps.

  4. alcusswhen says:

    No it is not, nor is it the same as a fixed amount home equity.
    On a fixed amount loan you don’t have money available to you until it is paid off and you take out another one.
    On a credit line this is the great part about it. One sets up the line
    of credit for the amount of the equity they have in there home. But
    only takes out the amount they need to pay off the bills. And leave
    the rest for future needs. This way they only pay interest on the amount of money they took out. And as they pay back that money the principle of the payments comes right back available again.

  5. David P says:

    OK, this is pretty simple actually. don’t take a heloc, because that’s not for debt consolidation, its for home improvements. take this for an example

    you have 20,000 in credit card debt, at 15% or higher, and you are making the min payments. lets say you spend $ 1000 a month on NON-Housing liabilities/debts.
    you refinance your house, and pay off the 20,000.
    now, you still owe 20,000, but its at 6.5%, and its tax deductible interest.(you now owe the same amount of money, but on your mortgage) i just saved you $ 800+ a month. because even though your mortgage rate went up, and your payment went up, (you borrowed more money) you still have a NET gain in cash flow.
    these people that say you should not mix consumer and housing debt are crazy,they have no idea what they are talking about because all they know is hear-say, media, and TV ads, and gossip, those are peoples opinions, what I’m saying is FACT, they are not educated the way i am on this subject, and trading high intrest debt for low interest debt is one of the best and smartest things you can do.
    put that debt into your mortgage, as you can see, there is a huge benefit.
    on top of eliminating your debts, freeing up your cash flow, and saving you on your taxes, i can also put any amount of equity into your bank account, and point you in the direction of companies who can help you turn 10,000 dollars into a million dollars, before you retire, and i can make it so your house will be paid for before you retire, so that you will also have a 500,000 to 1 million dollar asset, that will also be yours. i have mortgages that pretty much pay for themselves,and can custom tailor over 100 different program specs, to suit exactly your wants and needs.this is the real deal. I’m the best at what i do, and if you really want to be successfull in this endeavor, then call me.
    203-729-8900 ask for David Powell, or call my cell phone, at 203-410-4427. i want you as a client. so lets get started!

  6. dajuan_n_only says:

    I will tell you what I tell all my other clients, home equity lines are just credit cards of interest against your home, making the basic payments will never bring the principle down and their adjustable. Unless you are going to have that money you are borrowing very soon to pay it off in a lump sum it makes no sense. I will be honest with you yes you do avoid the fees of refinancing but that only helps you in the begginning. Most people end up refinancing the line to consolidate the payments once it adjust any way. Now all that they have done is wasted money because all this time they still owe the principal and they refinanced anyway. Also unless your credit is very good most banks will not allow you to get an equity line. If you like you can log onto there are some tools which you may find useful. You can also get a pre-qualification and register to win a free mortgage payment. We have been able to help people locate low interest rate loas with great terms and service. Additionaly for further assistance feel free to contact me direct at 866 530 7300 ext 7305 or by email at

  7. kevin s says:

    No. You can set up a equity line, usually for free, and use it as you need it over time. It’s a line of credit for you to use as you need it.

    Good luck,


  8. CA Mortgage Planner says:

    No, they are not the same. An equity line of credit (HELOC) is just like a credit card. The amount of credit you receive is dependant upon how much equity you have in your home.

    Depending on what your current mortgage rate, credit card interest rates, and monthly payments are, I could help you consolidate your debts, lower your monthly payments, AND lower your interest rate.

    If you are interested in this, give me a call at 408-515-6306 or fill out this online quick application:

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