Cash-out refinance
A new, larger first mortgage that pays off the old one and hands you the difference. You get a fixed rate and a new monthly payment — usually higher than the one you had. Best when you have strong income to carry a payment comfortably and want a lump sum at a known cost.
HELOC
A second lien that works like a credit card against your equity: draw what you need, pay interest on what you use, usually at a variable rate, with a required monthly payment that rises once the draw period ends. Best for shorter-term, flexible needs when the monthly payment is easy to absorb.
Reverse mortgage (HECM)
For 62+ only. No required monthly mortgage payment; interest accrues and the balance grows over time. Take a lump sum, a line of credit that grows, monthly draws, or a mix. You keep title and keep paying taxes, insurance and HOA dues. Best when the goal is cash flow or a safety reserve for the rest of your time in the home, and leaving the house itself to heirs is not the top priority.
The questions that decide it
How long will you stay? How comfortable is a monthly payment on your retirement income? Is this a one-time need or an ongoing one? Do your heirs want the house or its value? Answer those four and the right tool is usually obvious. Scott asks them before quoting anything.
What a reverse mortgage costs
HECMs carry upfront costs — including an FHA mortgage insurance premium — that are higher than a HELOC's and often comparable to a refinance's. Over a short horizon that matters a lot; over a long stay it matters less. Scott shows the total cost of all three side by side rather than selling one.
Scott · Loan Officer