HEI vs HELOC vs Cash-Out Refinance vs Reverse Mortgage

There is no single best way to tap your home equity. There is only the option that fits your goal, your budget, and your timeline. Here is how the main tools compare on the three questions that matter most.

The quick comparison

A second mortgage, or fixed second, sits near the HELOC column: it is a loan against your equity with a fixed rate and a monthly payment, leaving your first mortgage and its rate in place.

There is also a sixth option that often gets overlooked: a non-QM loan. It qualifies you on bank statements or assets instead of traditional W-2 income, so it can be the answer for a self-employed owner who can comfortably carry a payment but cannot easily document income for a HELOC or refinance. The rate is usually higher than a conventional loan, which is the trade for that flexibility.

How to think about it

Start with what you are protecting. If you have a low first-mortgage rate and do not want to lose it, a cash-out refinance is usually off the table, which points you toward an HEI, a HELOC, a second mortgage, or a reverse mortgage.

Then look at cash flow. If you cannot comfortably take on another monthly payment, an HEI or a reverse mortgage moves to the front, because neither adds one.

Finally, consider qualification. If your income is hard to document, the products that do not test income, an HEI and a reverse mortgage, become far more practical than a HELOC or a refinance.

Why work with an independent broker

Each of these is a different product from a different kind of provider, and the terms vary a lot between them. The point of working with an independent broker is that you are not steered toward whichever product one company happens to sell. The options get compared side by side, and the one that genuinely fits is the one that gets placed. If that turns out to be a HELOC instead of an HEI, you should hear that, not a sales pitch.