Between opting for cash-out refinancing and taking out a home equity line of credit (HELOC), there are several ways to finance your ADU project.
Cash-out refinancing is a good option if you can refinance your existing mortgage to access the surplus capital from your property’s value appreciation. This approach lets you leverage equity from your property and allocate it toward constructing your ADU.
A HELOC uses your primary residence as collateral against the loan. This type of financing offers excellent flexibility, as you can access funds as needed during the construction process.
You could also apply for a construction loan. This financing method is specifically designed for new buildings, including prefab homes, and provides financing throughout the construction phase until the completion of your ADU.
