Do I have to use a home-equity line of credit right away?
Some lenders require a “minimum draw” when you close on the line of credit, Mr. McBride said. So make sure it meets the timing of your project. If you must borrow $10,000 right off the bat, but your contractor can’t schedule you right away, you’ll pay interest unnecessarily.
Is there a disadvantage to using a fixed-rate home-equity loan for a remodel?
Loans are made in a lump sum. You can’t borrow more if your project goes over budget. Revolving lines of credit are more flexible. You borrow as you need the money, Mr. McBride said.
Can I deduct the interest I pay on a home-equity loan or line of credit?
Generally, yes. But check with your tax adviser.