BFG in the News: James answers a reader’s question about the best way to pay for a major home renovation

James Suazo, a Wealth Manager at Baron Financial Group, is quoted on this topic, answering a reader’s question on NJMoneyHelp.com by Karin Price Mueller, originally published in August 2026.

I just turned 60 and wanted to do a major renovation to the house. The house is almost paid for. Is there any benefit in taking a second mortgage or home equity loans to pay for the repairs? 

A 60-second read by James Suazo, ChFC^®: Congratulations on paying down your mortgage. That's a great position to be in as you think through your renovation options. 

A second mortgage is a general term for any loan that uses your home as collateral when you already have a preexisting primary mortgage. This includes home equity loans and home equity lines of credit (HELOC).

A home equity loan allows you to borrow a lump sum of cash which you receive upfront. From the beginning, you pay interest on the loan and start paying it back.   

A HELOC works more like a credit card, where you're approved for a certain amount and only owe interest and payment on what you actually use. So, if you are approved for $100,000, but only use $10,000, you only owe $10,000 plus interest. It is important to note that HELOCs typically have two repayment structures when applying. You can elect to pay interest only, or interest and principal. Selecting the interest and principal will have a higher monthly payment, but the balance owed at the end of ten years will be less than paying interest only. A typical HELOC is open for ten years. 

A HELOC is often a more flexible option since it gives flexibility and peace of mind, knowing it's there if you need it. You only pay interest on what you draw, which might better suit renovation costs that come in overtime. Not sure what your retirement status is, but it’s often easier to qualify for a HELOC while you're still working, since lenders lean heavily on income, and that can become more limited in retirement.

Interest on either option may still be tax deductible if the money goes toward improving the home, though that depends on your personal tax situation. You can discuss this with your accountant. 

It’s hard to make a blanket recommendation without knowing your full financial picture. Consider working with a financial professional to determine which option fits your goals and retirement timeline.

Read Karin Price Mueller’s article here. 

If you have any further questions about retirement, please reach out to the Baron Team.

Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, tax or investment advice. Please consult your financial planning and tax professional for personal advice.