Rising home values are freeing up a fortune for homeowners. And rising home values offer the means to pay for the work. The four-month project added a new family room, home office and deck. Such loans are appropriate if you are building a new home or a sizable addition like the DeMarrs, and they help you make sure that your payments don't get way ahead of the builder's progress.
Subsequent draws pay the builder as construction progresses.
You have two choices. Or you may use a home-equity line of credit. You do bear the uncertainty of an adjustable rate. But borrowers with the best credit ratings can often get a loan at prime. Even if you don't have much equity yet, you're a candidate for a loan that lets you borrow against the equity you will have in the home after remodeling.