Just the Peaks
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Refinance, Remodel, or Relax?
What Your Home’s Value Means for Your Next Move
For many homeowners, their house is not just a place to live; it’s a powerful financial asset. Everest Loan Officer Kim Donnelly says this is the viewpoint of the future:
“As property values shift and interest rates fluctuate, your home’s current value plays a massive role in shaping your ideal next steps,” explains Kim. “People are always talking about the state of the market, but I always urge homeowners to look inward first. The status of your home itself is the most important information you can have when considering a change in real estate—whatever that means for you.”
Whether you’re thinking about refinancing your mortgage, looking to renovate your home, or wondering whether you should sell, understanding your property’s equity is key. So, let’s explore these three primary options for leveraging that value—and the things you should consider before making your final decision.
Refinance: Secure a Better Rate or Tap into Equity
The first thing to consider is the value of your home. Has your home gone up (aka “appreciated”) in value since you first took out your current mortgage? This can happen for a variety of reasons, including normal fluctuations in the market. Most often, significant increases occur as a result of changes in demand (how many people are currently looking to buy) or availability (how many homes are currently available for purchase).
If your home has appreciated in value, and you’re not ready to sell, refinancing might help you:
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Lower your interest rate
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Reduce your monthly payments
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Switch from an adjustable-rate mortgage to a fixed-rate one
Refinancing may also allow you to tap into your home’s equity with something called a “cash-out refinance”:
“Essentially, a cash-out refinance lets you replace your current mortgage with a larger loan,” explains Kim. Then, you pocket the difference in cash. You can then use those additional funds to complete renovations, consolidate debt, or cover larger home expenses.”
However, refinancing isn’t always the right move. It typically requires at least 20% equity in your home as well as a credit score of 620 or higher (the higher the credit score, the better the rate). It’s also important to consider closing costs, which can average between 2 and 4% of the total loan amount.
“If you’re considering refinancing your mortgage, schedule a consultation with an experienced lending professional,” advises Kim. “They can help you determine whether or not a refinance would actually save you money in the long run.”
Remodel: Invest in Your Space—and Your Future
If now is not the right time to sell, but you know you’ll want to in the future, consider renovation. When you make improvements to your home, you’re cashing in on two great benefits:
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By creating an updated, well-designed living space, you’re increasing your own enjoyment of the space for as long as you decide to live there.
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By modernizing your home, as well as improving functionality and regulatory compliance, you’re increasing your home’s value for future sales and marketability.
The key to reaping both perks with every renovation is to choose projects with higher returns. Things like smart appliances, modern utilities, and exterior remodeling (ex. gardening, painting, gutters, and roofing) are great ways to increase curb appeal, enhance energy efficiency, and create a better living environment overall.
If you feel like renovations might be a better choice for your unique situation, you have a few different options for funding. If you’re not able to pay for upgrades out of pocket, you could look into:
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Using the surplus from a cash-out refinance
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Taking out a home equity loan (aka second mortgage) on your property
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Opening a Home Equity Line of Credit (HELOC) to pay for parts of a larger project
“Another thing you’ll want to consider is prioritizing renovations that increase your home’s resale value,” says Kim. “In general, things like kitchens, bathrooms, and appliances usually offer higher returns-on-investment for homeowners.”
You can also do some research on ROI (Return on Investment) rates for different projects in your area. As of 2024, some of the top national projects* included:
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Garage door replacement (193.9% cost recuperation)
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Steel entry door replacement (188.1% cost recuperation)
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Minor kitchen remodel (96.1 cost recuperation)
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Wood deck addition (82.9% cost recuperation)
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Vinyl siding replacement (80.2% cost recuperation)
*Source: The Journal of Light Construction
“Keep in mind that not all upgrades are created equal,” Kim warns. “Overspending on luxury finishes in a mid-range neighborhood may not yield the return you expect. This is where an experienced real estate professional can help. They can guide you through an assessment of your planned upgrades and see how they align with local market trends.”
Relax: Stay Put Until the Time is Right
As tempting as it can be to sell your home and cash in on that lump sum, sometimes the best move is no move at all.
As of March 2025, home prices were projected to rise 3.5% nationwide,* with stronger gains in suburban areas. This is the kind of information homeowners need to take into account before selling. If the market isn’t optimal for your home’s perceived value, refinancing or renovating your current home might be a better option.
*Source: Fannie Mae Housing Forecast
Or, if your research reveals that any financing might not be the best choice—based on the market and/or your unique situation—you may find that kicking back and enjoying your home as-is might be the ideal choice for you.
If your home’s value is at a bit of a pause, you might consider:
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Making mini updates to maintain value. You might be surprised at what a difference a fresh coat of paint can make!
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Paying down your current mortgage. Put any surplus funds toward your mortgage to build your overall equity.
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Saving up. Accumulate savings for when the time is right to renovate, refinance, or sell. These funds can help you keep your credit in good standing.
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Monitoring local stats. Use reliable sources to keep an eye on current interest rates, housing demands, and local inventory to scope out the right time to sell.
“Basically, you need to look at the whole situation,” explains Kim. “If your mortgage is at three percent and your credit card is at thirty percent, then a six-point-five percent interest rate on a refinance could save you loads. Alternatively, maybe a renovation can turn your average home into a dream home—like if space is an issue. It might make more sense to renovate and increase the value at the same time.”
When change would do more harm than good, it’s time to kick back and appreciate. That is, enjoy the space you have at the moment—and give your home the time to appreciate in value.
In many markets, demand for reliable housing is continuing to outpace the supply. So, if you’re not in a good position to sell, you may find that all that you need is time. Thankfully, whatever your situation, you’ve got Everest experts to guide you through the market.
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