I just typed a book to another question similar to yours, feel free to read it, perhaps the answer you're seeking will be there.
Best of luck to you.
REALTORÂ® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
There might be good reasons to do an equity loan though. Perhaps you'd like to pay off other debts which carry a higher interest rate and whose interest isn't deductible.
There is also an excellent loan called HomeStyle. It would allow us to refinance your first mortgage (if the rate it higher than market) and add in your improvement plan. Heck, you might even need an FHA 203(k) renovation loan.
So my recommendation is to contact an NMLS licensed loan officer for guidance. If a home improvement loan, the HomeStyle, the 203(k) and the Equity loan aren't included in the options suggested, then you should talk with another one. They won't make much commission on a small improvement loan, but it they don't suggest it to you, they only have their own best interest in mind. . .not yours.
It's complicated, isn't it?
Licensed Mortgage Loan Officer
NMLS # 228545
Home Equity Line of Credit: This is a loan that uses your home as collateral. You have to have a significant amount of equity in your home to do this usually.
Cash Out Refinancing: Depending on the equity you have in your home, the value of your home, and your current interest rates, this may be a good option as well. This will refinance your loan into another loan. You can "cash out" (get a check) and add that amount onto the principal of your loan as long as the current value of your home would be greater than your current mortgage balance plus the amount of cash you are looking for.
You need to speak with a lender about both of these. Usually the HELOCs are done by banks. If you are looking to do a refinancing, it may be better to go with a smaller, local lender for the best rates. If you need a referral to a lender, please don't hesitate to ask.
Keller Williams Elite Park Cities