| Focus | A homeowner decision |
| Review | Lender requirements apply |
Separate the project decision from the financing decision
A contractor quote answers what the work costs. A financing offer answers how you will pay for it. Review both documents before treating a monthly payment as the project budget. Ask whether the price changes if you pay without the offered financing, whether optional work is included, and which party is providing the credit. A convenient application is useful, but it is only one part of the comparison.
Match the funds to the payment schedule
Write down the deposit date, material payments, progress invoices, and final payment. Then ask each lender when funds would actually be accessible and whether an initial advance is required. Do not sign a project schedule that assumes an unapproved loan will close on time. If an offer uses promotional terms, identify when those terms end and what happens to any unpaid balance.
Compare the same project over the same period
Use the same project amount for both options. Record the cash price, fees, starting payment, possible payment changes, payoff horizon, and balance remaining at that horizon. A longer repayment period can make an expensive option look easier to afford. Include the effect on your existing mortgage when comparing a separate equity loan with a refinance. If the project changes, update the comparison before accepting more work.
Questions before a deposit
Ask who receives each payment, what evidence shows that a milestone is complete, and how a change order changes the price and timing. The FTC recommends comparing financing and obtaining written estimates. Verify the contractor independently; financing approval does not establish workmanship, permits, or completion. Keep a copy of the work contract separate from the credit agreement.
Prepare the next conversation
Use the home equity planning worksheet to organize your assumptions. Leave anything you do not know blank for discussion. The worksheet does not check eligibility or obtain a lender offer. You can request a broker conversation when you are ready to review your estimated home value, mortgage balance, and requested amount. Do not send account numbers or financial documents through a public inquiry form.
Read the source guidance. Provider examples describe that provider only. This guide is educational. A home-secured loan puts the property at risk if repayment fails. Program availability, documentation, costs, and approval depend on the lender and your circumstances.