You may be asking yourself how you're going to pay for all your remodeling plans. As a homeowner, you're in an ideal position to use the growing equity in your home to finance home improvement projects. This is one of the smartest means of financing because it allows you to: • Lower the cost of your remodel over the long run, since mortgage and home equity interest rates are generally lower than most other kinds of consumer credit. • Potentially deduct the interest payments from your taxes, lowering your cost even more. (consult your tax advisor about tax deductibility)

You can use your equity in two different ways:

• Mortgage refinancing. If interest rates are favorable, you can replace your first mortgage with a new, larger mortgage that includes the value of your equity. In addition to this standard cash-out refinancing, MidAmerican Home Services Mortgage offers other products that give you even more money up front by adding in the value of the planned improvement. If you refinance your mortgage, you'll keep the convenience of one home loan and one monthly payment.

• Home equity financing. You can keep your existing mortgage intact, supplementing it with a home equity loan or line of credit. Home equity accounts let you use your current equity and - in the case of certain MidAmerican Mortgage Home Equity accounts - on the costs of qualifying improvements to your remodeled home. 2 Mortgage refinance or home equity financing - how do you decide?

It all boils down to the math. Find out how much each financing option will cost by checking current interest rates for each and considering the loan terms you desire. Take a look at some of our online calculators - starting with our Mortgage Refinance calculator. In addition, a MidAmerican Home Services Home Mortgage consultant is always ready to help you decide the best option for you.

You'll want to consider: Which option is more affordable? Calculate how much each of these options will cost, including the effect on your monthly payments as well as up-front costs and fees, some of which may be assessed at closing. Make sure you can pay for the loan terms that you accept. What is the ultimate cost of the loan? A 30-year mortgage can spread out your mortgage payments and lower the monthly cost, but you could wind up paying more interest over the life of the loan. In addition, don't forget to factor in the effects of the up-front costs and fees, some of which may be assessed at closing. Some homeowners would rather pay more principal off each month and build their equity at a faster rate, some would not. Accessing your home equity is a smart way to manage your finances and pay for important purchases like college tuition or home improvements. Both cash-out refinance and home equity accounts are usually tax-deductible, but have many differences. Comparing the features of each option will help you make the best decision.