• It is important to list every interest item on the present mortgage or expenses that include interest. Make up a excel sheet of all these items, or what ever book keeping software being used.
• In 1 column, put the original balance or principle balance.
• In the next column, put the current outstanding balance.
• Then in 3rd column, put the interest rate on that expense or debt, like 2nd mortgage, supplies from a hardware store for projects, cost of the fence etc.
• In the 4th column insert any payment terms like net 10 or net 30 etc.
• Then list what collateral, if any, you pledged to get the loan.

By looking at today's' outstanding principle balance, you can determine how much a new loan would have to be so you can have 1 balance or 1 payment. What is today's interest rate? Most lenders will give an amortization chart with bottom line figures for a new loan.

This becomes a debt schedule that you can talk over with the other people in your world that might also make payments. A loan officer will need this and other items of existing debt you must pay. If your expenditures are higher than that lender's guidelines, it is likely that you will not get a refinance or remodeling loan. Debt consolidation is a viable alternative to bankruptcy, however unless you can make a considerable savings, the loan origination fees may be something not on the list but will increase your existing debt.

Besides interest, there may be typical cost of an application fee, to that you might add loan origination fee, loan closing fees, and maybe a packing fee. These are not spoken of when you see that newspaper ad or television ad, they will show up on the schedule of closing costs.

Even though the interest rate is lower, all those fees can raise the principle balance higher than ever planned for. If you are changing lenders, you could also have credit report expense, appraisal fee, and building inspection fees if the home would come with 12 month replacement fee. Those 12-month dollars sit in an account for a year, not in your hands if you remodel to sell the home.

If you are selling, there can be 6% commission fee - 3% for listing agent and 3% for selling agent. You could have numerous fees you never thought about in the beginning.

It may be considered unwise to take a shot term loan, like at an appliance store, and drag it out 30 years. How many stoves, air conditioners, carpets, furnaces, sprinkler heads, etc, do you know will last 30 years? So you may be paying for a couple kitchens remodels and need a 3rd one in 30 years. That is why these are called short-term loans. They should be paid off in a short time.

On the other hand, a 3-car garage would likely last 30 years and would increase values.
An appraiser gave some guidelines that could be most valuable.

Housing improvements below grade are about 1/3 as valuable as those above grade.
What is the value of central air conditioning? Look at some appraisals. On the area describing site value, location value, square foot value above grade, room value above grade, etc you can determine of your remodeling will come back to you as profit at time of sale.

Rule of thumb states kitchen remodel and bathroom remodel are higher return on your investment and will probably recover their price at time of sale.

Unless it is a refinance, a debt consolidation loan may save you money in the long run, maybe staying with the existing mortgage and interest rate is your best bet.
Point to ponder, for the first 15 or more years of a 20-year mortgage, most of the money goes to interest. During the depression of the 1930's, those homes and farms almost paid off were the first to be repossessed. Why? No more interest going into bank vaults.

Look at an ARM loan, low interest rates for the first 5 years and a huge balloon payment at the end of 5 years. Is it obvious that balance is nearly the beginning principle you owed after paying 5 years or 60 monthly payments? Maybe what you got credit for was the down payment, maybe?

These are some basic tips for taking advantage of interest's rates, not being a slave to it, with a construction loan. It will be up to you to add the creativity to make it how you want it all to be.