Understanding Your Additional Financing Options

If you have built up assets outside of your home—such as in an investment portfolio—you may have additional borrowing options to help fund your renovation project. These tools allow you to leverage your financial position without touching your home equity, offering flexibility and potentially faster approval times.

Margin Loans

A margin loan allows you to borrow against the value of your investment portfolio without selling your securities. This type of loan is commonly offered by brokerage firms and provides quick access to liquidity.

  • How It Works: Your securities act as collateral for the loan. You can borrow a percentage of the portfolio’s value—often between 50% and 70%, depending on the brokerage and the assets held.
  • Interest Rates: Generally lower than unsecured loans, but rates vary depending on your lender and account size.
  • Repayment: Flexible repayment options, but the loan is subject to margin calls if your portfolio value drops.
  • Best for: Homeowners with substantial investment accounts who want to avoid selling investments (and potentially triggering capital gains taxes).

Secured Asset Credit Lines

A secured asset credit line offers similar flexibility but may be backed by a broader range of financial assets, including stocks, bonds, mutual funds, and other investments.

  • How It Works: This revolving line of credit is secured by your financial assets. Like a HELOC, you can draw funds as needed and only pay interest on the amount you borrow.
  • Interest Rates: Often competitive, based on the value and type of your pledged assets.
  • Repayment: Typically interest-only payments during the draw period, with flexible repayment schedules.
  • Best for: Homeowners with diversified financial portfolios who want a flexible borrowing option without tapping home equity.

Additional Financing Options to Consider

  • Securities-Based Lending: Specialized loan products from wealth management firms that may offer more favorable terms for high-net-worth individuals.
  • Personal Loans: Unsecured loans with higher interest rates than secured options but without the need for collateral.
  • Cash-Out Refinance: Replaces your existing mortgage with a new one for a higher amount and gives you the difference in cash (distinct from HELOANs/HELOCs but worth comparing).
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*The information provided on this page is for informational purposes only and does not constitute financial advice. Loan terms, rates, and eligibility criteria can vary by lender and individual circumstances. Always consult with a licensed financial advisor, mortgage specialist, or tax professional before making borrowing decisions.*