From home improvement projects to paying for a child's education, there are a multitude of reasons people try to draw money from their homes. While some choose to refinance, others choose to take out a second mortgage. Which is right for you? Here's some food for thought.

Refinancing v. Second Mortgages: Take a Personal Inventory

To determine which is right for you, you must first determine how competitive your existing mortgage rate is in comparison to current rates. You must also evaluate how many years you have already paid for your home. If you've been making payments for only a few years and today's market rates are comparable to yours, you may want to consider refinancing. On the other hand, if the rate on your existing mortgage is substantially lower than current market rates and you've been paying on your mortgage for some time, a second mortgage may be more sensible than starting over with a new loan.

For more information about refinancing or second mortgages, visit About.com, banking.about.com, or ERate, www.erate.com.