Now that you've been in your home for a few years and you've established some fairness, you might consider making renovations with a second mortgage.
The improvement of housing takes many forms. Like a new kitchen, bathroom, roof, cladding, etc.
You can acquire a home improvement loan or a second mortgage in one of three ways. Refinancing with withdrawal of money, a home equity loan, or a home equity line of credit.
My suggestion would be a home equity line of credit. (HECL)
The HECL is a very convenient loan for an owner because it is not mandatory that you use the funds immediately. And when you decide to use the money, you only use the amount you need.
Suppose you have a $ 25,000 home equity line of credit. The lender will give you this money as a line only when you choose to do so. The line also comes with a checkbook so you can write checks at your convenience.
A refinancing with cashing, or a standard mortgage loan is given to you in the form of a lump sum, and you start paying the interest and principal immediately.
On HECL, you only pay interest and principal when you use money, and only on the amount you use.
So suppose you hire a contractor to put a new bathroom in your house for fifteen thousand dollars. At the end of the project you will have to write a check from your HECL checkbook, it's as simple as that.
By that time, your monthly payments would start to come into play.
Most HECLs are amortized over a twenty-year period, and the payment is only interest to the top ten. So make sure you know the payment schedule before closing.
The improvement of the habitat is a big step to take with your home. Not only does this add value to your home, it also improves the quality of your life. And the interest is tax deductible.
As always, keep educating yourself and make sure to shop around for the best deal.