The tax form is asking if our mortgage is a Home equity loan. What exactly is a Home equity loan? We refinanced in 2019, there was some cash back, but it was not a HELOC.

[Carl]

 A home equity loan is sometimes and more commonly referred to as a Home Equity Line of Credit, or HELOC. This is where you take out a physically separate loan against the existing equity in your home. It generally has no impact on your original loan.

If you refinanced your home that is not a HELOC.

If you refinanced with a cash out and did not use the cash out money to build, buy or improve your home, then you are limited on the mortgage interest you are allowed to claim. You can only claim the percentage of mortgage interest equal to the percentage of the refi amount, that was used to pay off the original loan.

So if at the time of the refi you owed $50,000 on the original loan, and you refi'd for $70,000 with a $20,000 cash out, that means that only 71.5% of the refi was used to pay off the original loan. Therefore, only 71.5% of the refi loan mortgage interest is deductible over the life of that new loan.

If you later use any of the cash out money to "build, buy, or improve your home" in the future, then that can change the percentage of mortgage interest you can claim in the future. But tracing rules apply to that cash out money to do that.

[RayW7]

agreeing with @Carl

Generally, these are the differences between a Home Equity Loan and a HELOC. 

• Home equity loans come with fixed payments and a fixed interest rate for the term of the loan.  You receive the full amount of the loan proceeds at one time.
• HELOCs are revolving credit lines that come with variable interest rates and, as a result, variable minimum payment amounts.  Lines of credit can have a predetermined loan maximum amount but can typically be drawn on with amounts as needed with the payments based on the current outstanding amount. 

-follow this link for additional information-

Are Home Interest Loans Deductible From Taxes? - TurboTax ...