| The answer largely depends on the interest rate of your first mortgage and the amount of equity that you have in your home. You didn't tell us either. If you can refinance your current mortgage at a lower APR than your current APR AND can pull out enough equity to cover your remodeling costs, get a new 15 year mortgage that includes the money that you'll need for remodeling. If your current mortgage APR is less than the APR of a new mortgage AND you can pull out enough equity to cover your remodeling costs, keep your current mortgage and get either a second mortgage or a HELOC to cover remodeling costs. If you do not have enough equity in your home to cover remodeling costs, you'll probably need to get a construction loan. When construction is completed, compare current interest rates and determine whether a new first mortgage or a second mortgage or a HELOC is the best way to pay off your construction loan using the information presented in the second paragraph. If you finance your remodeling with either a first or second mortgage, keep the excess funds in a money market account or other high rate interest bearing account until the funds are needed for construction. If you get a HELOC, simply withdraw the funds as needed. I've highlighted some of the key considerations but during the process I've made some assumptions and used too many "ifs". I suggest that you visit a few local mortgage lenders and ask for advice. After you gather more information you can get second opinions here. It sounds like a great project. Enjoy the journey! | 
