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  • Writer's pictureAlyce Lopez


Let's talk money! You can't get through any renovation without talking dollars and cents. We all have differing values based on our individual preferences, needs and priorities. Some may save for a renovation, while others may choose to finance their next renovation. We reached out to Andre Enriques, Branch Manager at First Priority Home Loans in San Diego to talk about the 2 most popular ways to finance your next renovation.

Andre has been in the mortgage industry for over 20 years. He has assisted us with our own personal home loans and is a wealth of knowledge. I thought it would be helpful to learn a little more about the mortgage industry by tapping into his expertise. We sat down with Andre and asked him a few questions. But before we dive in, let's get personal. Meet Andre and his beautiful family!


"What I enjoy most about my job is meeting new people and having the opportunity to guide them through the loan process. Over the years I have made some great friendships and lifelong connections."


"I feel that the biggest mistakes one can make during the loan process is to work with someone who doesn’t put their customers interest first and working with someone who doesn’t thoroughly explain all the details during the loan process."


"Here’s an interesting fact about me: I enjoy a good Old Fashioned with a great steak."

Now let's get to the meat, no pun intended! I too love a great steak! The 2 most common forms of financing a home renovation are a Home Equity Loan (HELOC) and a Traditional Cash Out Refinance. Andre gives us the scoop on both options below.


We asked Andre to give us the HELOC for dummies breakdown below. "A home equity line of credit (HELOC) is a type of loan that allows you to borrow money against the value of your home. It's a popular choice for homeowners who want to finance a home renovation because it typically offers lower payments. A HELOC offers an interest only payment option for the 1st 10 years, so it can be used like a credit card when needed, and your payment is based on the amount that you spend.

When applying for a HELOC lenders will assess factors such as your income, credit score, and the appraised value of your home. HELOCs often come with variable interest rates, which means the interest rate can fluctuate over time which is not necessarily a bad thing (when interest rates improve the payments will be lower). The interest rate is usually based on an index (e.g., the prime rate ) plus a margin of 1.5%-2%. It's important to understand the terms and conditions regarding interest rate adjustments."


"A cash-out refinance is a type of mortgage refinance in which a homeowner replaces their existing mortgage with a new loan for a higher amount, allowing them to receive the difference in cash. The primary purpose of a cash-out refinance is to tap into the equity that has been built up in their home.

The homeowner needs to have sufficient equity in their home to qualify for a cash-out refinance. Lenders typically require a minimum amount of equity, often around 20% or more of the home's appraised value. The 20% equity must include the desired cash out and the current mortgage balance. Please note, there are other loan programs available that allow for less than 20% equity on a cash out refinance, for example a VA loan for qualified Veterans.

As part of the cash-out refinance process, the lender will typically require an appraisal to determine the current market value of the property. This value is used to calculate the maximum amount that can be borrowed. After the new mortgage loan is closed, the homeowner will then receive the cash difference between the new loan amount and the payoff amount of the existing mortgage.

The cash-out refinance results in a new mortgage with a higher principal balance. The homeowner makes monthly mortgage payments based on the new loan terms, which include both principal and interest and in some cases taxes and insurance. The interest rate on the new loan may be different from the previous mortgage rate, depending on prevailing market rates and the homeowner's creditworthiness.

Did I mention? A renovation can add thousands of dollars in value to your home."

We agree Andre! A renovation definitely increases your home's value. It also has been documented that your environment can affect your overall sense of social support, comfort, and level of stimulation. That means your overall well-being is impacted by your surroundings. If you come home to a tired home that isn't functional or serving your needs and aesthetic, it reflects on your overall well-being.

We are passionate about creating spaces that make your life more beautiful every day! And we love working with other professionals in the housing industry to make your next renovation turnkey! Financing your renovation may be the very first step in achieving your dream home. Thank you, Andre, for all your knowledge.

Please don't hesitate to reach out to Andre Enriques for any simple or complex questions around financing your next home project! You can reach Andre at or 619-208-6499

Ready to renovate with The True House? Head to our services page to book a complimentary discovery call or email us at for more details about working with us!

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