Does a cash out refinance increase my loan balance

Yes. The new loan balance includes what you owe plus the amount you take as cash out, plus any financed costs if applicable.

Does a HELOC change my first mortgage

Usually no. A HELOC is typically a separate line of credit secured by your home, subject to lien position and lender requirements.

Is interest charged differently

Cash out refinances typically charge interest on the full new loan balance. HELOCs typically charge interest only on the amount you use.

Which is better for home improvements

HELOCs can work well when you pay for projects in stages. Cash out refinances can work well when you need a larger one-time amount.

Does a cash-out refinance increase my loan balance?

Yes. A cash-out refinance replaces your existing mortgage with a larger loan that includes the cash you receive at closing.

Is interest charged differently on a HELOC and cash-out refinance?

Yes. A cash-out refinance charges interest on the full loan balance, while a HELOC typically charges interest only on the amount you borrow.

HELOC vs Cash Out Refinance (Non A6)

Liberty Home Mortgage helps homeowners in Lewisville (75056) and Denton County compare home equity options (program dependent). A HELOC (Home Equity Line of Credit) may provide a revolving line you can draw from, while a cash-out refinance replaces your current mortgage with a new loan that may include cash back at closing (program dependent).

Some refinance scenarios may not be classified as Texas A6 cash-out loans depending on the transaction structure and applicable Texas requirements (program dependent). The safest way to confirm is to review your current loan type, property, and the exact goal for the funds before moving forward.

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Simple Comparison

A HELOC may be helpful if you want flexible access to funds over time (program dependent). A cash-out refinance may be helpful if you want a single new mortgage and access equity in one transaction (program dependent). Underwriting typically reviews credit, income, equity, property details, and overall ability to repay.

HELOC (Home Equity Line of Credit)

Revolving access to funds (draw as needed) up to an approved limit (program dependent)
You may borrow only what you need, when you need it
Interest is typically charged only on the amount you use

Cash-Out Refinance

Replaces your current mortgage with a new loan (program dependent)
May provide cash back at closing from available equity (program dependent)
Creates a new rate and new loan term

Program guidelines vary by lender. All loans are subject to underwriting approval.

Why “Non A6” Matters

Texas home equity transactions can be classified differently depending on the loan type and the exact structure of the refinance (program dependent). Some scenarios may not be treated the same way as a Texas A6 cash-out refinance. The best way to confirm is to review your current mortgage, your goal, and your property details so the lender can determine the correct structure and required disclosures.

If you want the Texas A6 version of this topic, see: HELOC vs Texas Cash-Out (A6) Loans.

Here are related loan programs you can compare (eligibility and program rules apply):

Related Programs

Compare these related home equity and refinance pages:

Frequently Asked Questions

Is “Non A6” guaranteed?

No. Classification depends on the exact loan type, structure, and Texas requirements. A lender must review your file to confirm what applies (program dependent).

Is a HELOC always better than cash-out refinance?

Not always. A HELOC may be useful for flexible draw access, while a cash-out refinance may be useful if you want one new loan and a single closing. The best fit depends on your goal and eligibility (program dependent).

Do I need an appraisal?

Some transactions require an appraisal and some may not, depending on the product and lender guidelines (program dependent).

Can I use equity for debt consolidation or home improvements?

Often yes, but the allowed uses and the required structure depend on the loan program and Texas rules (program dependent).

What do you need to compare options?

Usually we start with your property city, your current mortgage statement, your goal for the funds, and a basic snapshot of income, assets, and credit (program dependent).

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Liberty Home Mortgage • 4400 State Hwy 121 STE 300 • Lewisville, TX 75056

All loans are subject to underwriting approval and credit review. Some restrictions may apply. Programs, rates, and terms are subject to change without notice.