Cash-Out Refinance

Refinancing for an amount in excess of the balance of the original loan. The borrower takes "cash-out" of the transaction.

Home Equity Loan

A mortgage loan with a second-priority claim against a property in the event that the borrower defaults. The lender who holds the second mortgage gets paid only after the lender holding the first mortgage is paid.

Typically, interest rates for mortgage refinance loans are less than that of a home equity loan or line of credit.