My home is tax-valued at $550k, and I owe $300k on it. My mortgage interest rate (28 years left on 30 year term) is only 3%.
I want to finance a house addition, which might cost about 100k-200k.
At first I thought HELOC would be better than a home equity loan, because we don't know the exact amount the addition will cost, and we can gradually charge the HELOC during the construction, instead of having to start paying interest right now at the beginning on big, "safe" loan amount.
If I get a HE loan, do those have fixed interest rates? What are the advantages and disadvantages of that vs. a HEOLC?
I also could "cash out" refinance my home. But since rates are significantly higher, I think there's no scenario where that would be better than keeping my low-interest morgage and getting a HE loan. But I am happy to be corrected.