Another significant difference may involve outstanding loan balances and flexibility.

Refinancing a home involves disbursing all proceeds and recording a new mortgage loan for the full amount borrowed.

Among the considerations when evaluating either a home equity loan or refinance: How long will the owner keep the home?

Both sides of the arguments have merits, and either option is the best choice in different situations.

When a homeowner needs funds for home improvements, education, medical treatment or other obligations, both equity loans and refinances are good choices, with low interest and favorable terms.

Refinancing a home offers the same advantageous interest rates and tax deductibility, while also delivering lower monthly payments because of the longer payback terms (up to 40 years).

Unfortunately, additional "features" include higher closing costs and longer approval and closing time periods.

This is because credit card debt is perceived as riskier than mortgage debt, and credit card companies charge interest accordingly.

But if you can move debt that costs you 13.66% to a vehicle that charges you only 3.71%, you can effectively give yourself almost a 10% return on your money.

You’ve probably noticed how low mortgage rates have been during the past few years.

The 30-year mortgage rate hit 3.31% in November 2012, the lowest rate in history.

However, an equity line of credit allows borrowers to use available funds only as they need them.

No interest is charged on the amount of the credit line, only on the amounts used.

Refinancing involves receiving a new first mortgage while eliminating the existing home loan.