Home Equity vs. Cash-Out Guide glossary
Key terms
The short version
These terms come up when comparing a second lien with a cash-out refinance, each with a primary source.
Last reviewed against the primary sources listed below.
- Home equity line of credit
- A revolving line secured by your home that you draw on as needed. Source: CFPB: What is a home equity line of credit (HELOC)?
- Home equity loan
- A one-time lump sum second mortgage with fixed payments. Source: CFPB: What is a home equity line of credit (HELOC)?
- Lien position
- The order in which lenders are repaid from the home if it is sold. Source: CFPB: What is a home equity line of credit (HELOC)?
- Subordination
- An agreement to keep a lien in a lower position behind a new loan. Source: CFPB: What is a home equity line of credit (HELOC)?