Once you have lived in your home for a few years you may have the urge to rebuild and make things a little nicer and comfortable. The best option in this case would be to refinance your mortgage. What happens with a refinance is that the lender will look at the current value of your home as opposed to the amount you have mortgaged, and they give you a certain amount of funds from the difference. This means that your mortgage gets bigger and the funds from the difference come to you. The advantage is that this can be a better deal than negotiating for a separate home improvements loan.
However, there are a few things that you should watch out for. Read through your contracts thoroughly and make sure that you do not have to pay any additional fees to do this. Some lenders charge a fee to refinance a mortgage. Also, you should get an idea of the current interest rates and make sure the interest rate for your new mortgage is on par with those. Some lenders may take the opportunity to offer you the same interest rate as your old mortgage, even though the market rate is much lesser. At this point you should also compare interest rates and terms of home improvement loans. You may stumble across a plan that provides you with better benefits than refinancing your mortgage. However, since most home improvement loans are for a shorter period, you may want to re-plan your finances to make sure that you can make the payments plus the interest.