Mortgage loans and credit lines all use your home as security and the interest for these residential loans is usually tax deductible. However, these loans differ on many levels. Although equity loans are usually lump-sum loans that a fixed amortization schedule, depending on the type of loan you choose, the interest rate can be either fixed or adjustable. At the same time, home credit lines enable you to access money from the real estate appreciation with your property in a similar manner as a credit card allows you borrow money against your credit limit.

Another mystery for some people is refinance loans that offer cash back. Home refinancing with cash-out is different from home equity loans because it is a substitute of your existing mortgage, rather than an additional mortgage. With cash-out refinancing you can borrow more than the mortgage balance and use the additional cash you receive at your discretion. According to a Jason Pizzinat, “homeowners must address the following questions before using their home equity.