Home equity loan
A home equity loan can be a good idea if you have a specific project, know the exact amount you'll need and don't plan to borrow more in the near future. It's a one-time thing.
Keep in mind: You're taking out an installment loan with a fixed rate, term and monthly payment. Closing costs apply, but are typically lower than those of first mortgages.
Home equity line of credit
A home equity line of credit (HELOC) provides ongoing access to funding for a variety of needs. It helps when you don't know the cost of a major project yet or when you'll have multiple expenses over time.
Keep in mind: You're more flexible with this revolving line of credit. It features multiple monthly payment options allowing convenient ways to repay. An option to pay no closing costs is available (however closing costs are typically lower than those of first mortgages). You can use the line of credit for 10 years, followed by a repayment period.
Cash-out refinancing can provide you with a lump sum of cash and a new mortgage with one affordable monthly payment.
Keep in mind: You'll have just one mortgage—but less home equity than you have now. Compared to a home equity, cash-out refinancing can provide a lower fixed rate. Closing costs are also higher, so you'll need to stay in your home longer to recoup the expense.
Questions to help you decide
How much will you need to borrow?
If you're not sure yet, a HELOC might be the choice for you. If you know this amount, compare the interest, fees and costs on home equity loans and cash-out refinancing.
Do you have more expenses coming?
A HELOC will give you flexibility to meet big-ticket expenses in the future.
How long will you stay in your home?
With cash-out refinancing, you need to stay in your home long enough to recoup closing costs.
Interested in using your home's equity?
8 Steps to Simplify Your Finances
Learn eight easy ways to make managing your finances less stressful.
Adding Value To Your Home
Home equity loans and lines of credit help homeowners finance renovations and home improvements.
Financial Planning 101
Learn the basics of establishing a financial plan that you can start today.
Insuring Your Improvements
Make sure you have the right amount of protection for home upgrades and renovations.
Loans, lines of credit and credit cards are subject to credit approval.
All BB&T mortgage professionals are registered on the Nationwide Mortgage Licensing System & Registry (NMLS), which promotes uniformity and transparency throughout the residential real estate industry. Search the NMLS Registry.
Branch Banking and Trust Company is a Member FDIC and an Equal Housing Lender.